BofA/Merrill Lynch Downgrades Sonic Auto (SAH) to Underperform; Execution Issues

July 22, 2014 3:35 PM EDT Send to a Friend
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Price: $27.22 +1.49%

Rating Summary:
    4 Buy, 3 Hold, 3 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 14 | Down: 28 | New: 51
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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.

For an analyst ratings summary and ratings history on Sonic Auto click here. For more ratings news on Sonic Auto click here.

Shares of Sonic Auto closed at $26.19 yesterday.



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Analyst Comments, Analyst EPS Change, Analyst PT Change, Downgrades, Hot Downgrades

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Merrill Lynch, Bank of America

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