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Investing.com -- The U.S. auto services industry is entering a period of deep structural change, according to BTIG, which launched coverage of the sector Sunday with a bullish view on Driven Brands and a more cautious stance on Mister Car Wash (NYSE:MCW).
Analysts initiated Driven Brands with a Buy rating and $22 price target, citing strength in its oil change and auto glass businesses.
Mister Car Wash was rated Neutral, with BTIG warning that competitive pressure remains elevated despite signs of moderation.
The $435 billion aftermarket services space is being reshaped by competing forces—new technology, insurance policies, macro pressure and a wave of private equity-fueled consolidation.
“The industry today is at a true crossroads,” analysts wrote, noting that advanced driver assistance systems (ADAS) are both increasing repair costs and reducing accident frequency.
For Driven Brands, BTIG sees “underappreciated opportunity” in the firm’s Auto Glass Now unit and a favorable market structure in oil changes, which are viewed as relatively non-discretionary.
While challenges remain, a newly introduced segment-based reporting structure should help investors better understand the company’s value, the note said.
Mister Car Wash, by contrast, is seen as a well-run operator facing rising industry saturation.
Although the company holds the top market share and has not entered any new states since its 2021 IPO, others have expanded their networks, complicating growth plans.
High consumer stretch and uncertainty around whether market exits will reduce store counts or simply shuffle ownership also weighed on BTIG’s stance.
The brokerage expects the sector to keep evolving rapidly, with technology, regulation and shifting consumer behavior shaping winners and losers in the years ahead.