AutoNation (NYSE:AN) Stock Price Breaks Above 50 Day Moving Average - Time to Sell?

Key Points

• AutoNation shares rose above their 50-day moving average of $176.82, reaching as high as $192.99 before last trading at $179.05.
• Third-quarter adjusted EPS of $5.11 and revenue of $7.01 billion exceeded estimates, supported by record After-Sales profit, higher finance income and $620 million in stock buybacks. However, GAAP net income fell 25% to $162.3 million and revenue was essentially flat year over year.
• Analyst sentiment is mixed, with a consensus “Hold” rating and an average price target of $230; management also warned that economic pressure may cause consumers to delay vehicle repairs, potentially hurting future After-Sales demand.

AutoNation, Inc. (NYSE:AN - Get Free Report) shares crossed above its 50-day moving average during trading on Friday. The stock has a 50-day moving average of $176.82 and traded as high as $192.99. AutoNation shares last traded at $179.05, with a volume of 1,244,844 shares.

AutoNation News Roundup

Here are the key news stories impacting AutoNation this week:

• Positive Sentiment: AutoNation reported third-quarter adjusted earnings of $5.11 per share, above the $5.08 consensus estimate, while revenue of $7.01 billion exceeded expectations of $6.93 billion. Earnings also improved from $5.01 per share a year earlier. AutoNation third-quarter earnings report
• Positive Sentiment: Record After-Sales gross profit and sharply higher AutoNation Finance income—$15.4 million versus $1.5 million a year earlier—helped support results despite a challenging vehicle market. AutoNation service resilience article
• Positive Sentiment: The company repurchased approximately $620 million of stock during the first nine months and received an additional $1 billion authorization. Management’s view that AN shares are undervalued could provide continued support for the stock and boost per-share results. Why AutoNation stock popped after earnings
• Neutral Sentiment: Revenue was essentially flat year over year at roughly $7.0 billion. Liquidity stood at $1.5 billion, including $51 million in cash, while the company maintained strong reported returns, including a 31.24% return on equity.
• Negative Sentiment: GAAP net income fell 25% to $162.3 million, operating income declined 16%, and GAAP diluted EPS decreased to $4.87 from $5.65. Gross profit also slipped 2% year over year. AutoNation third-quarter revenue and net income report
• Negative Sentiment: Chief Executive Officer Mike Manley warned that economic pressure is causing consumers to delay vehicle repairs, creating a risk for future After-Sales demand even though that division was resilient this quarter. AutoNation CEO warns about delayed car repairs

Analyst Upgrades and Downgrades

Several brokerages have weighed in on AN. Stephens upped their target price on AutoNation from $220.00 to $232.00 and gave the stock an "equal weight" rating in a report on Monday, August 10th. Weiss Ratings lowered AutoNation from a "buy (b-)" rating to a "hold (c+)" rating in a research note on Monday, September 21st. Zacks Research lowered AutoNation from a "hold" rating to a "strong sell" rating in a research note on Friday, October 16th. JPMorgan Chase & Co. decreased their price objective on AutoNation from $210.00 to $185.00 and set an "overweight" rating for the company in a report on Tuesday, October 6th. Finally, Morgan Stanley lowered shares of AutoNation from an "overweight" rating to a "negative" rating in a research note on Monday, October 5th. Eight research analysts have rated the stock with a Buy rating, three have issued a Hold rating and two have given a Sell rating to the stock. According to MarketBeat.com, the company currently has a consensus rating of "Hold" and an average target price of $230.00.

AutoNation Trading Up 5.7%

The company has a market capitalization of $5.92 billion, a PE ratio of 8.29, a price-to-earnings-growth ratio of 0.83 and a beta of 0.81. The company's fifty day moving average is $176.82 and its 200-day moving average is $193.73. The company has a debt-to-equity ratio of 2.68, a current ratio of 0.78 and a quick ratio of 0.18.

AutoNation (NYSE:AN - Get Free Report) last issued its quarterly earnings data on Friday, October 30th. The company reported $5.11 EPS for the quarter, topping analysts' consensus estimates of $5.08 by $0.03. The company had revenue of $7.01 billion during the quarter, compared to the consensus estimate of $6.93 billion. AutoNation had a net margin of 2.82% and a return on equity of 31.24%. AutoNation's revenue for the quarter was down .4% compared to the same quarter last year. During the same quarter in the previous year, the firm posted $5.01 earnings per share. On average, analysts anticipate that AutoNation, Inc. will post 21.07 EPS for the current fiscal year.

Insider Activity

In other news, Director Lisa Lutoff-Perlo sold 900 shares of the business's stock in a transaction on Wednesday, August 5th. The stock was sold at an average price of $220.00, for a total value of $198,000.00. Following the completion of the transaction, the director directly owned 7,989 shares of the company's stock, valued at approximately $1,757,580. The trade was a 10.12% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. Corporate insiders own 1.40% of the company's stock.

Institutional Investors Weigh In On AutoNation

A number of institutional investors have recently added to or reduced their stakes in the stock. Oregon Public Employees Retirement Fund boosted its holdings in AutoNation by 3.9% in the third quarter. Oregon Public Employees Retirement Fund now owns 5,365 shares of the company's stock worth $845,000 after acquiring an additional 200 shares in the last quarter. Greatmark Investment Partners Inc. increased its holdings in shares of AutoNation by 4.4% during the third quarter. Greatmark Investment Partners Inc. now owns 175,371 shares of the company's stock valued at $27,610,000 after acquiring an additional 7,418 shares in the last quarter. Citizens Financial Group Inc. RI increased its holdings in shares of AutoNation by 89.9% during the third quarter. Citizens Financial Group Inc. RI now owns 2,617 shares of the company's stock valued at $412,000 after acquiring an additional 1,239 shares in the last quarter. Evergreen Capital Management LLC increased its holdings in shares of AutoNation by 4.5% during the third quarter. Evergreen Capital Management LLC now owns 1,620 shares of the company's stock valued at $255,000 after acquiring an additional 70 shares in the last quarter. Finally, Inspire Investing LLC raised its position in shares of AutoNation by 8.3% in the 3rd quarter. Inspire Investing LLC now owns 25,852 shares of the company's stock valued at $4,070,000 after purchasing an additional 1,989 shares during the last quarter. Institutional investors own 94.62% of the company's stock.

AutoNation Company Profile

AutoNation, Inc is a U.S.-based automotive retailer that sells new and used vehicles through a network of dealerships and online sales channels. The company represents a range of domestic, import and luxury automotive brands, offering passenger cars, trucks and sport utility vehicles.

In addition to vehicle sales, AutoNation provides automotive maintenance and repair, parts, collision-repair services, vehicle protection products and financing options. Its retail operations include traditional dealerships as well as AutoNation USA locations, which focus primarily on used vehicles and related services.

Founded in 1996 as Republic Industries, the company adopted the AutoNation name as it developed its automotive retail business.

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