Analysts at JPMorgan Chase & Co. have reduced their target price for Sonic Automotive (NYSE: SAH) from $70.00 to $67.00. This downgrade, which was communicated in a research report issued on Friday, reflects a cautious outlook on the automotive retailer’s stock performance. With this adjustment, JPMorgan has assigned an “underweight” rating to Sonic Automotive. The new price target suggests a potential upside of 6% from the stock’s previous closing value.
The recent downgrade comes amid a broader reassessment of Sonic Automotive’s market position. Other firms have also provided insights on the stock’s future. On December 8, Morgan Stanley set a target price of $68.00. Meanwhile, Wall Street Zen downgraded Sonic Automotive from a “buy” to a “hold” rating on January 11. Additionally, Barclays initiated coverage on the stock on November 11, assigning an “equal weight” rating and a target price of $71.00. In a more positive move, Zacks Research upgraded Sonic Automotive from a “strong sell” to a “hold” rating on the same day. Overall, four investment analysts have rated the stock as a buy, five have given it a hold rating, and one has issued a sell rating. According to MarketBeat, Sonic Automotive currently holds an average rating of “hold” with an average target price of $79.88.
Financial Performance and Market Response
Sonic Automotive recently released its earnings report for the third quarter on October 23, 2023. The company reported earnings per share (EPS) of $1.41, missing analyst expectations of $1.82 by $0.41. Revenue for the quarter reached $3.97 billion, surpassing consensus estimates of $3.59 billion. The company’s net margin stood at 0.86%, with a return on equity of 21.65%. Compared to the same quarter last year, Sonic Automotive’s revenue increased by 13.8%, while the previous year’s EPS was $1.26. Analysts project that Sonic Automotive will achieve an EPS of 6.14 for the full fiscal year.
Institutional Investment Trends
Recent activity among institutional investors indicates a significant shift in holdings related to Sonic Automotive. Northwestern Mutual Wealth Management Co. increased its position in the company by an impressive 992.5% during the second quarter, now owning 437 shares valued at approximately $35,000 after acquiring an additional 397 shares. Other notable investments include Aster Capital Management DIFC Ltd, which purchased shares worth around $63,000, and National Bank of Canada FI, which acquired a stake valued at about $78,000. CoreCap Advisors LLC and Raymond James Financial Inc. also entered new positions, further highlighting the growing interest in Sonic Automotive. Currently, institutional investors hold 46.92% of the company’s stock.
About Sonic Automotive
Based in Charlotte, North Carolina, Sonic Automotive, Inc. is a publicly traded automotive retailer that operates a wide network of franchised new-car and used-vehicle dealerships throughout the United States. The company offers a range of services, including vehicle sales, leasing, finance and insurance products, as well as service, parts, and collision repair. Sonic Automotive represents numerous major automotive brands and also markets a selection of pre-owned vehicles under its own branding. In addition to traditional dealership operations, Sonic Automotive has developed digital retail capabilities, allowing customers to research, shop, and complete transactions online.
As Sonic Automotive navigates these market challenges and institutional shifts, analysts will be closely monitoring its performance and future projections in the coming months.
