JPMorgan analyst Rajat Gupta reiterated a Neutral rating and $75.00 price target on Sonic Auto (NYSE: SAH).

The analyst comments "Quick take: EPS of $1.26 was in-line with JPMe and compared to consensus of $1.44. Overall EBITDA was ~4% above JPMe (see Table 1 for details), driven by a combination of better gross profit and lower SG&A. EBITDA beat was driven by stronger-than-expected contribution from both franchise ($115 mn EBITDA inc. SBC vs. JPMe $111 mn) and EchoPark ($9 mn vs. JPMe +$7 mn). CDK outage remained a drag in the month of July, with ~$15 mn pre-tax impact in 3Q on a non-GAAP basis or ~$0.32/sh. Excluding CDK, as well as unsually higher tax-rate, the base of 3Q EPS is ~$1.65 and we look for more color on the call related to impacts from the BMW stop-sale (see our preview where we had reduced estimates significantly for BMW). On the franchise business, GP was ahead on stronger new units (+2% vs JPM -6%) and P&S profit growth (+8% vs JPMe +6%) while new/used/F&I GPUs were all slightly below. Used units SS growth of -2% missed by ~1%. Like in recent quarters, SG&A leverage was solid and a key driver of the beat, with franchise SG&A/GP of 71.6% vs. JPMe 72.4%. On EchoPark, same-market unit sales were up 2% y/y, with total units of 17.8K (vs JPMe 17K) and retail +F&I GPU tracked $3.1K in 3Q, ~$60 higher than JPMe. SAH now anticipates ~$7-8mn in EchoPark EBITDA (prior JPMe $6 mn). Overall, we believe results are much better than feared in context of CDK, BMW and Hurricane headwinds, setting up a favorable base for earning in 4Q24 and into 2025 where we continue to see significant upside to consensus estimates. In context of recent underperformance (600bps over the last 3 months), we expect SAH shares to recoup this and more today, and over the next week, as underlying 3Q24 results are likely to drive higher relative revisions."

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 $55.47 yesterday.