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In a notable shift within the automotive retail sector, shares of AutoNation Inc (NYSE:AN). have touched a 52-week low, dipping to $149.43. According to InvestingPro data, the company currently trades at an attractive P/E ratio of 9.5x, with analyst price targets ranging from $175 to $245. The company, a leading player in the automotive retail industry with a market capitalization of $6.25 billion, has experienced a subtle yet persistent downward trend over the past year, culminating in this recent low point. Despite the broader market's fluctuations, AutoNation's stock has remained relatively stable with a marginal 0.06% return over the past year, reflecting investor sentiment and industry challenges. This latest price level serves as a critical marker for AutoNation's stock, signaling a period of reflection for investors as they consider the company's future prospects in a changing economic landscape. With earnings scheduled for April 17 and an overall FAIR financial health rating, investors can access deeper insights through InvestingPro's comprehensive research report, which includes additional ProTips and detailed financial analysis.
In other recent news, AutoNation reported fourth-quarter 2024 results that exceeded analyst expectations, with adjusted earnings per share reaching $4.97, compared to the consensus estimate of $4.24. The company's revenue for the quarter was $7.21 billion, surpassing the expected $6.67 billion and marking an 8% increase year-over-year on a same-store basis. Analysts at Jefferies and Stephens responded to these results by raising their price targets for AutoNation to $190 and $200, respectively, while maintaining their Hold and Equal Weight ratings. Jefferies noted a strong new vehicle comparable sales increase of 13.3%, driven by growth in new unit volume and premium luxury sales.
Additionally, AutoNation's After-Sales and Customer Financial Services segments demonstrated growth, with same-store gross profit increasing by 5% and 6%, respectively. The company's finance arm originated $1.1 billion in loans during 2024, contributing to a strong balance sheet with $1.3 billion in liquidity. S&P Global Ratings assigned a 'BBB-' rating to AutoNation's proposed senior unsecured notes due 2035, indicating a stable outlook for the company's creditworthiness.
AutoNation continued its share repurchase program, buying back 0.6 million shares for $104 million in the fourth quarter and 2.9 million shares for the full year. Despite recent EBITDA margin moderation, S&P Global Ratings expects AutoNation's leverage to remain below 3x, with free operating cash flow to debt staying at least about 15% in 2025. These developments highlight AutoNation's strategic initiatives and financial stability amid evolving market dynamics.
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