Sonic Automotive (NYSE:SAH) Shares Gap Up - Here's Why

Key Points

• Sonic Automotive shares opened higher, rising from a prior close of $61.26 to $63.76 before trading at $62.98. The company has a market capitalization of about $1.97 billion.
• Analyst sentiment is mixed: JPMorgan and Zacks downgraded the stock, while Needham and Bank of America raised their price targets and maintained Buy ratings. The overall consensus rating is Hold, with an average price target of $90.12.
• The company exceeded quarterly expectations with earnings of $1.82 per share and revenue of $3.93 billion, while maintaining a quarterly dividend of $0.41 per share, equivalent to a 2.6% yield. Insiders have also purchased shares recently, and insiders own 43.68% of the company.

Sonic Automotive, Inc. (NYSE:SAH - Get Free Report)'s stock price gapped up prior to trading on Wednesday. The stock had previously closed at $61.26, but opened at $63.76. Sonic Automotive shares last traded at $62.98, with a volume of 4,290 shares trading hands.

Analyst Ratings Changes

SAH has been the topic of several research analyst reports. JPMorgan Chase & Co. cut their price target on shares of Sonic Automotive from $72.00 to $64.00 and set an "underweight" rating on the stock in a research note on Tuesday, October 6th. Zacks Research cut Sonic Automotive from a "hold" rating to a "strong sell" rating in a research note on Monday, October 12th. Needham & Company LLC raised their price objective on shares of Sonic Automotive from $90.00 to $139.00 and gave the company a "buy" rating in a research report on Friday, July 31st. Bank of America boosted their target price on shares of Sonic Automotive from $91.00 to $108.00 and gave the stock a "buy" rating in a research report on Thursday, July 9th. Finally, Weiss Ratings cut Sonic Automotive from a "buy (b-)" rating to a "hold (c+)" rating in a report on Monday. Four investment analysts have rated the stock with a Buy rating, three have given a Hold rating and three have assigned a Sell rating to the company's stock. According to MarketBeat, the company presently has a consensus rating of "Hold" and an average price target of $90.12.

Sonic Automotive Stock Performance

The stock has a market capitalization of $1.97 billion, a PE ratio of 9.96 and a beta of 0.92. The company's fifty day simple moving average is $68.71 and its two-hundred day simple moving average is $73.10.

Sonic Automotive (NYSE:SAH - Get Free Report) last released its quarterly earnings results on Thursday, July 30th. The company reported $1.82 EPS for the quarter, beating the consensus estimate of $1.75 by $0.07. The business had revenue of $3.93 billion during the quarter, compared to analyst estimates of $3.78 billion. During the same quarter in the prior year, the company earned $2.19 earnings per share. The firm's revenue for the quarter was up 7.6% compared to the same quarter last year. Sell-side analysts forecast that Sonic Automotive, Inc. will post 6.71 EPS for the current fiscal year.

Sonic Automotive Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Thursday, October 15th. Shareholders of record on Tuesday, September 15th were given a dividend of $0.41 per share. The ex-dividend date of this dividend was Tuesday, September 15th. This represents a $1.64 annualized dividend and a yield of 2.6%. Sonic Automotive's dividend payout ratio (DPR) is presently 26.16%.

Insider Buying and Selling at Sonic Automotive

In related news, major shareholder Paul P. Rusnak acquired 27,756 shares of Sonic Automotive stock in a transaction dated Monday, October 5th. The shares were acquired at an average cost of $59.76 per share, for a total transaction of $1,658,698.56. Following the completion of the transaction, the insider directly owned 5,149,401 shares of the company's stock, valued at $307,728,203.76. The trade was a 0.54% increase in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available through this hyperlink. Insiders acquired 76,776 shares of company stock valued at $4,584,694 over the last ninety days. Insiders own 43.68% of the company's stock.

Institutional Trading of Sonic Automotive

Hedge funds and other institutional investors have recently bought and sold shares of the company. Dimensional Fund Advisors LP lifted its stake in shares of Sonic Automotive by 3.8% during the 1st quarter. Dimensional Fund Advisors LP now owns 1,313,857 shares of the company's stock worth $90,088,000 after purchasing an additional 48,599 shares during the period. Empowered Funds LLC lifted its position in Sonic Automotive by 64.4% during the first quarter. Empowered Funds LLC now owns 131,302 shares of the company's stock worth $9,003,000 after buying an additional 51,420 shares during the period. Heartland Advisors Inc. purchased a new position in Sonic Automotive during the first quarter worth about $8,450,000. Renaissance Technologies LLC boosted its stake in Sonic Automotive by 11.5% in the 1st quarter. Renaissance Technologies LLC now owns 88,126 shares of the company's stock worth $6,043,000 after buying an additional 9,100 shares during the last quarter. Finally, Denali Advisors LLC acquired a new stake in Sonic Automotive in the 2nd quarter worth about $4,799,000. 46.92% of the stock is owned by hedge funds and other institutional investors.

About Sonic Automotive

Sonic Automotive, Inc is a U.S.-based automotive retailer headquartered in Charlotte, North Carolina. The company operates franchised dealerships that sell new and pre-owned vehicles from a range of automobile manufacturers, along with related automotive products and services.

Its dealership operations provide vehicle financing and insurance products, maintenance and repair services, replacement parts, and collision-repair services. Sonic Automotive also operates EchoPark Automotive, a used-vehicle business focused on offering pre-owned vehicles and related finance and service products through dedicated retail locations.

Founded in 1997 by automotive entrepreneur O.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.