UBS Starts Sonic Auto (SAH) at Buy
UBS analyst Robert Saltzman initiates coverage on Sonic Auto (NYSE: SAH) with a Buy rating and a price target of $90.00.
The analyst comments: “We initiate coverage of SAH with a Buy rating. We believe that consensus estimates for the stock appear too low for 2026/2027 with UBS EPS est. +7%/+10%, respectively, vs. consensus. We are encouraged by recent EchoPark performance having returned to positive EBITDA after years of used vehicle industry headwinds and believe the business has reached an inflection as evidenced by record quarterly 1Q26 EBITDA ($18.6mm). We see a path for SAH to double store count of EchoPark between now and 2030, which has the potential to contribute ~$3.30 of EPS from the segment by 2030 vs. ~$6.70 total company EPS in 2025, and what we believe was a ~$0.60 contribution from EchoPark in 2025. Note, we assume ~$0.65/$0.75 contribution from EchoPark in our 26/27 base case model. The larger part of the EchoPark opportunity is further out (and beyond our valuation reference period), but we believe this supports the above 3-year average multiple we apply to our valuation. Still, our valuation multiple is only slightly above current levels, and we believe that a reacceleration in revenues/profitability in SAH's EchoPark business presents an interesting option for the equity value of the stock.”
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Shares of Sonic Auto closed at $78.69 yesterday.