UBS Cuts Price Target on Sonic Automotive (SAH) Following 3Q

November 2, 2016 9:56 AM EDT
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Price: $23.15 -1.91%

Rating Summary:
    5 Buy, 7 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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UBS maintained a Sell rating on Sonic Automotive (NYSE: SAH), and cut the price target to $16.00 (from $17.00), Following the company's 3Q earnings report. Sales of $2.56bn beat consensus of $2.49bn. However, margins were below estimates across all segments. UBS lowered 2016 EPS estimates from $2.05 to $1.95.

Analyst Colin Langan commented, "SAH shares traded down 5% today following its margin miss and downward guidance revision. Sales of $2.56bn beat consensus of $2.49bn. Compared to our estimates, most of the beat was driven by higher P&S and used wholesale sales. However, margins were below our estimates across all segments. SAH pointed to headwinds from high BMW incentives and inventory (started year with 7,000 BMW inventory, down to 4,300 today), and weakness in the Houston market. SAH lowered FY guidance due particularly to uncertainty on BMW incentives. We maintain our Sell rating given the continued new & used margin pressure."

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 $16.95 yesterday.

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