Wells Fargo Downgrades AutoNation Inc. (AN) to Underperform; Meaningfully Exceeded Our Valuation Range
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Price: $209.41 +0.48%
Rating Summary:
17 Buy, 10 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
17 Buy, 10 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Wells Fargo downgraded AutoNation Inc. (NYSE: AN) from Market Perform to Underperform. Valuation range increased from $27-29 to $29-31.
Wells analyst says, "AutoNation now trades meaningfully above our valuation range and at more than a 50% premium to publicly traded peers versus its historical 16% average 10-year premium. More importantly, AutoNation cycles one-time benefits related to facilities enhancements which meaningfully improved new vehicle gross margin and SG&A expense ratios, starting in Q4 2010. We don’t believe the Street has factored in the absence of these bonuses later this year, setting the company up to disappoint."
"Our general view of the group remains neutral, as the stocks already price in a 14MM SAAR (2013 in our models). Estimate changes are as follows: AutoNation's Q2 EPS goes from $0.44 to $0.42, FY2011 is lowered from $1.80 to $1.78 and FY2012 goes from $2.14 to $2.12. Group 1's (NYSE: GPI) Q2 EPS is lowered from $0.85 to $0.79, FY2011 is unchanged at $3.14, and FY2012 goes from $3.87 to $3.88. Our Q2 estimates for Penske Automotive (NYSE: PAG) go from $0.44 to $0.42, FY2011 is unchanged at $1.72 and our 2012E EPS goes from $1.87 to $1.88."
For more ratings news on AutoNation Inc. click here and for the rating history of AutoNation Inc. click here.
Shares of AutoNation Inc. closed at $39.36 yesterday.
Wells analyst says, "AutoNation now trades meaningfully above our valuation range and at more than a 50% premium to publicly traded peers versus its historical 16% average 10-year premium. More importantly, AutoNation cycles one-time benefits related to facilities enhancements which meaningfully improved new vehicle gross margin and SG&A expense ratios, starting in Q4 2010. We don’t believe the Street has factored in the absence of these bonuses later this year, setting the company up to disappoint."
"Our general view of the group remains neutral, as the stocks already price in a 14MM SAAR (2013 in our models). Estimate changes are as follows: AutoNation's Q2 EPS goes from $0.44 to $0.42, FY2011 is lowered from $1.80 to $1.78 and FY2012 goes from $2.14 to $2.12. Group 1's (NYSE: GPI) Q2 EPS is lowered from $0.85 to $0.79, FY2011 is unchanged at $3.14, and FY2012 goes from $3.87 to $3.88. Our Q2 estimates for Penske Automotive (NYSE: PAG) go from $0.44 to $0.42, FY2011 is unchanged at $1.72 and our 2012E EPS goes from $1.87 to $1.88."
For more ratings news on AutoNation Inc. click here and for the rating history of AutoNation Inc. click here.
Shares of AutoNation Inc. closed at $39.36 yesterday.
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