Guggenheim's analyst, Ronald Jewsikow, has increased the price target for AutoNation (AN, Financial) from $215 to $230, while maintaining a Buy rating on the company’s stock. This adjustment comes as the firm updates its forecasts for auto suppliers and dealers ahead of the group's second-quarter results. Jewsikow highlights that, so far, tariffs have not significantly affected automotive demand, pricing, or costs. This strategic assessment indicates a positive outlook for AutoNation in the near term.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 10 analysts, the average target price for AutoNation Inc (AN, Financial) is $210.81 with a high estimate of $255.00 and a low estimate of $175.00. The average target implies an upside of 3.14% from the current price of $204.40. More detailed estimate data can be found on the AutoNation Inc (AN) Forecast page.
Based on the consensus recommendation from 14 brokerage firms, AutoNation Inc's (AN, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for AutoNation Inc (AN, Financial) in one year is $190.56, suggesting a downside of 6.77% from the current price of $204.4. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the AutoNation Inc (AN) Summary page.
AN Key Business Developments
Release Date: April 25, 2025
- Total Revenue: $6.7 billion, an increase of 3% year-over-year.
- Same Store New Vehicle Revenue: Increased by 10%.
- Gross Profit: $1.2 billion, up 3% from the previous year.
- Gross Profit Margin: 18.2% of revenue.
- After Sales Gross Profit Margin: Increased by 140 basis points year-over-year.
- Adjusted SG&A: 67.5% of gross profit.
- Adjusted Operating Margin: 5% of revenue.
- Adjusted Net Income: $184 million, a 3% decrease year-over-year.
- Adjusted Earnings Per Share (EPS): $4.68, up 4% from the previous year.
- New Vehicle Unit Sales: Increased by 6% total store basis, 7% same store basis.
- New Vehicle Unit Profitability: $2,803 per unit.
- Used Vehicle Gross Profit: Increased by 12%.
- Customer Financial Services (CFS) PVR: $2,703, up 3% from the previous year.
- AN Finance Originations: $460 million during the quarter.
- Share Repurchases: $225 million worth of shares at an average price of $165 per share.
- Store Acquisitions: Acquired two stores in Greater Denver, Colorado, generating approximately $220 million in revenue.
- Free Cash Flow: $237 million, with a cash flow conversion of 129% of adjusted net income.
- Leverage: 2.56 times EBITDA.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- AutoNation Inc (AN, Financial) reported strong new unit growth and expanded unit profitability in both used vehicles and customer financial services.
- The company achieved record after sales profits, with a 140 basis point margin expansion from the previous year.
- Operating cash generation was solid, allowing for capital deployment in share repurchases and accretive acquisitions.
- AutoNation Inc (AN) increased its market share year over year and month over month in the markets it serves.
- The company's finance arm, AN Finance, crossed over to profitability ahead of expectations, with improved credit quality and reduced delinquencies.
Negative Points
- The gross profit margin of 18.2% of revenue was slightly down from the previous year.
- Adjusted net income decreased by 3% year over year, marking the smallest decline in three years but still a decrease.
- New vehicle unit profitability was down seasonally from the fourth quarter, reflecting a normal trend.
- Supply availability remains a challenge, particularly for mid and higher-priced used vehicles.
- The impact of tariffs remains a significant concern, with potential effects on new unit availability and pricing.
