AutoNation, Inc. (NYSE:AN) has received a consensus recommendation of “Moderate Buy” from eleven brokerages currently covering the stock. According to Marketbeat Ratings, this includes three analysts who rated the stock as a hold, seven who issued buy ratings, and one who assigned a strong buy rating. The average price target for AutoNation over the next 12 months is set at $244.00.
Recent reports from various research analysts indicate a range of opinions on the stock. On September 10, 2023, Bank of America lowered its target price from $255.00 to $250.00, maintaining a “buy” rating. Similarly, on December 15, 2023, Weiss Ratings reaffirmed a “buy (b)” rating for AutoNation. Notably, Evercore ISI raised its target price significantly from $240.00 to $300.00 on November 24, 2023, while giving the stock an “outperform” rating. Conversely, Wells Fargo & Company reduced its price target from $221.00 to $220.00 on October 15, 2023, categorizing the stock as “equal weight.” Additionally, on September 13, 2023, Wall Street Zen downgraded AutoNation from a “buy” to a “hold” rating.
Strong Quarterly Earnings and Stock Buyback Program
AutoNation recently released its quarterly earnings data on October 23, 2023, reporting earnings per share (EPS) of $5.01, exceeding the consensus estimate of $4.85 by $0.16. The company generated revenue of $7.04 billion for the quarter, surpassing analyst expectations of $6.74 billion. This reflects a 6.9% increase in quarterly revenue compared to the same period last year, when the company reported an EPS of $4.02.
In a significant move, AutoNation’s Board of Directors approved a stock buyback program on October 31, 2023. This program allows the company to repurchase up to $1.00 billion worth of shares, constituting approximately 13.7% of its stock. Such buyback initiatives typically indicate that a company’s board believes its shares are undervalued.
Institutional Investor Activity
Recent activity from institutional investors has also influenced AutoNation’s stock dynamics. Notably, Vanguard Group Inc. increased its holdings by 1.1% during the third quarter, now owning 3,176,626 shares valued at approximately $694.95 million after acquiring an additional 34,153 shares. Brave Warrior Advisors LLC boosted its position by 7.5% in the same timeframe, now holding 1,214,510 shares worth $241.26 million.
Furthermore, Invesco Ltd. grew its stake by 11.2%, holding 907,163 shares valued at around $198.46 million. Other significant movements included AQR Capital Management LLC, which raised its holdings by 10.5%, and Holocene Advisors LP, which increased its stake by an impressive 38.3%, now owning 548,677 shares valued at $120.03 million. Overall, hedge funds and institutional investors collectively own 94.62% of AutoNation’s stock.
Founded in 1996 and headquartered in Fort Lauderdale, Florida, AutoNation is the largest automotive retailer in the United States. The company operates a network of franchised new vehicle dealerships, pre-owned vehicle superstores, and collision-repair centers. It provides a wide array of automotive products and services, including the sale of new cars and light trucks, financing, insurance, and extended service contracts.
As AutoNation continues to navigate the evolving automotive market, analysts and investors will be closely monitoring its performance against these updated targets and recommendations.
