Sonic Auto stock price target raised to $85 from $65 at CFRA

Investing.com - CFRA has raised its price target on Sonic Automotive (NYSE:SAH) to $85 from $65 while maintaining a Hold rating on the stock. The company’s shares are currently trading at $88.37, near their 52-week high of $89.62, after delivering an impressive 62.1% return over the past year.

The research firm cited strong outperformance by Sonic and other auto dealership stocks compared to the broader market over the past few months, with shares now trading well above CFRA’s previous target. According to InvestingPro data, the stock’s technical indicators suggest it’s in overbought territory, with multiple metrics pointing to strong momentum across various timeframes.

CFRA expects auto sales and margins could improve further in coming quarters as interest rates decline, with additional support from Sonic’s high-margin Parts and Service segment.

The firm noted Sonic’s proven ability to grow earnings per share through accretive acquisitions and share buybacks, highlighting the fragmented automotive retail industry as offering potential for growth through acquisition.

Sonic Automotive is scheduled to report its second-quarter earnings results on the morning of July 24.

In other recent news, Sonic Automotive Inc . reported its first-quarter 2025 earnings, achieving a record consolidated total revenue of $3.7 billion, surpassing the expected $3.47 billion. The company’s adjusted earnings per share (EPS) was $1.48, slightly below the forecast of $1.42. Sonic Automotive also expanded its luxury footprint by acquiring four Jaguar Land Rover dealerships in California, adding approximately $500 million in annual sales. This acquisition increases Sonic Auto’s national footprint to 177 franchises, strengthening its presence in a key luxury market.

The company held its annual stockholders meeting, where all nine board members were reelected, and executive compensation for the previous fiscal year was approved. Additionally, Grant Thornton LLP was ratified as the company’s independent auditor for fiscal 2025. Benchmark analyst Michael Albanese reiterated a Buy rating on Sonic Auto, with a price target of $76.00, highlighting the supportive off-lease exposure for the company’s used vehicle business. Sonic Automotive maintains a cautious outlook due to market uncertainties, including tariffs, and plans to expand its EchoPark stores by the end of the year.

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