Cold Weather Hits AutoNation (AN) Comps in Q1, But Q2 Should Show Solidification - Stifel

Stifel retains its Hold rating on AutoNation (NYSE: AN) following a Q1 sales update from the company.

Analyst James Albertine commented, For dealers, used sales flow through will be the primary upside driver for auto dealers in 2014, in our opinion, which should drive outperformance in the back half of the year as the used to new comp sales trends expand in 1Q-2Q14. We note the broad swath of winter storm activity across the U.S. and anticipate some P&S-related headwinds in the coming quarter due to dealer closures. We are adjusting our model to reflect reported new vehicle comp, slightly lower used vehicle comp (given Jan/Feb weather), and lower P&S comp sales, as we believe dealer closures impacted various parts of the business including reconditioning flow-through. That said, we remain optimistic that March trends persist into 2Q and reiterate our 16.25 mm SAAR estimate or roughly +4% y/y growth for the U.S. industry in 2014.

For an analyst ratings summary and ratings history on AutoNation Inc. click here. For more ratings news on AutoNation Inc. click here.

Shares of AutoNation Inc. closed at $54.69 yesterday.

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