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Investing.com - Sonic Auto (NYSE:SAH), a $2.8 billion automotive retailer currently trading near its 52-week high of $83.31, has acquired four Jaguar Land Rover dealerships in California, adding approximately $500 million in annual sales, representing a 3% increase to its business, according to Benchmark. InvestingPro data shows the company is currently overvalued based on its Fair Value analysis.
The newly acquired locations include JLR dealerships in Los Angeles, Newport Beach, San Jose, and Pasadena, comprising seven franchises in total. These stores were previously owned by US Auto Trust, though acquisition multiples were not disclosed.
This expansion increases Sonic Auto’s national footprint to 177 franchises and strengthens its presence in one of the country’s strongest luxury markets. The acquisition comes as Jaguar has previously announced plans to transition to a fully electric vehicle lineup.
Benchmark believes the Land Rover assets were likely the primary target of the acquisition, noting that Land Rover dealerships typically maintain healthy days’ supply of approximately 60 days. The luxury brand also benefits from high customer loyalty and average selling prices typically exceeding $100,000.
Benchmark analyst Michael Albanese reiterated a Buy rating on Sonic Auto with a $76.00 price target, noting that the luxury mix provides supportive off-lease exposure for the company’s used vehicle business.
In other recent news, Sonic Automotive reported its first-quarter 2025 earnings, highlighting a record consolidated revenue of $3.7 billion, which exceeded the anticipated $3.47 billion. The company’s adjusted earnings per share (EPS) were $1.48, slightly below the projected $1.42. Sonic Automotive’s EchoPark segment showed a 5% increase in retail unit sales, contributing to a robust performance. The company continues to focus on expanding its EchoPark stores and managing market uncertainties, such as tariffs. Additionally, Sonic Automotive’s annual stockholders meeting confirmed the reelection of all nine board members and the ratification of Grant Thornton LLP as the independent auditor for fiscal 2025. The executive compensation for fiscal 2024 was also approved by shareholders. Despite the earnings miss, the company remains optimistic about its strategic direction and revenue growth. Sonic Automotive’s leadership emphasized their commitment to delivering high-quality guest experiences and maintaining resilience in a challenging market environment.
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