BofA/Merrill Lynch Downgrades Sonic Auto (SAH) to Underperform; Execution Issues
- Procter & Gamble (PG) Misses Q2 EPS by 12c; Sees FY15 Core Earnings In-Line to Down Versus Prior Year
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BofA/Merrill Lynch downgraded Sonic Auto (NYSE: SAH) from Buy to Underperform with a price target of $27.00 (from $39.00) saying Q2 results showed fundamental execution issues.
Analyst John Murphy cited: 1) Sonic continually underperforms its publicly traded dealer peers (ABG, AN, GPI, LAD and PAG) on same-store sales growth in several categories, and 2) Sonic’s SG&A expense has been rising faster than its gross profit growth, resulting in negative flow-through for the last two quarters and only 6% flow-through in 2013).
The firm lowered 2014 from $2.10 to $1.99, 2015 from $2.60 to $2.15 and 2016 from $2.95 to $2.40.
Shares of Sonic Auto closed at $26.19 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change, Downgrades, Hot Downgrades
Related EntitiesMerrill Lynch, Bank of America
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