AutoNation, Inc. (NYSE:AN) has received a consensus recommendation of “Moderate Buy” from eleven brokerages currently covering the stock, according to Marketbeat Ratings. Among these analysts, three have assigned a hold rating, while seven have issued buy recommendations and one has indicated a strong buy. The average price target set for AutoNation shares over the next twelve months is currently positioned at $244.00.
Recent reports from various analysts highlight shifting perspectives on AutoNation’s stock. On September 10th, Bank of America revised its target price from $255.00 to $250.00, maintaining a buy rating. Meanwhile, Weiss Ratings reaffirmed a “buy (b)” rating on December 15th. Notably, on November 24th, Evercore ISI increased its target price from $240.00 to $300.00 while designating the stock with an “outperform” rating. In contrast, Wells Fargo & Company adjusted its price target from $221.00 to $220.00 and maintained an “equal weight” rating as of October 15th. Additionally, on September 13th, Wall Street Zen downgraded AutoNation from a “buy” to a “hold” recommendation.
Strong Quarterly Performance and Stock Buyback Announcement
AutoNation released its latest quarterly earnings report on October 23rd, revealing a $5.01 earnings per share (EPS), surpassing the consensus estimate of $4.85 by $0.16. The company reported quarterly revenues of $7.04 billion, significantly exceeding analyst expectations of $6.74 billion. This marked a notable increase of 6.9% in revenue compared to the same quarter the previous year, when AutoNation recorded an EPS of $4.02.
In a strategic move, AutoNation’s Board of Directors approved a stock buyback program on October 31st, allowing the company to repurchase up to $1.00 billion in shares. This initiative permits the company to buy back approximately 13.7% of its outstanding stock through open market transactions. Such buyback programs are often interpreted as a signal that the board believes the company’s shares are undervalued, potentially indicating confidence in future performance.
Institutional Investment Activity
In recent months, several institutional investors have adjusted their stakes in AutoNation. Vanguard Group Inc. increased its holdings by 1.1% during the third quarter, now owning 3,176,626 shares worth approximately $694.95 million after acquiring an additional 34,153 shares. Additionally, Brave Warrior Advisors LLC grew its position by 7.5%, owning 1,214,510 shares valued at around $241.26 million.
Moreover, Invesco Ltd. raised its stake in AutoNation by 11.2% during the same quarter, now holding 907,163 shares worth $198.46 million. AQR Capital Management LLC also increased its holdings by 10.5%, owning 697,927 shares valued at about $151.97 million. Notably, Holocene Advisors LP significantly boosted its stake by 38.3%, now owning 548,677 shares worth approximately $120.03 million. Collectively, institutional investors control 94.62% of AutoNation’s stock.
Founded in 1996 and headquartered in Fort Lauderdale, Florida, AutoNation, Inc. is recognized as 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, offering a wide range of automotive products and services, including financing and insurance. As the market continues to evolve, AutoNation’s performance and strategic decisions will be pivotal in shaping its future trajectory in the competitive automotive retail landscape.
