Sonic Automotive (NYSE:SAH) Shares Up 9.4% - Still a Buy?

Key Points

• Sonic Automotive shares jumped 9.4% to about $65.68, although trading volume was 84% below average. The stock remains below its 50-day and 200-day moving averages.
• Analyst sentiment is mixed: five analysts rate the stock a Buy, two a Hold, and three a Sell, resulting in an overall “Hold” rating and an average price target of $90.12.
• The company exceeded quarterly earnings and revenue expectations, while maintaining a 2.5% dividend yield. Insider buying also continued, with insiders owning 43.68% of the company.

Sonic Automotive, Inc. (NYSE:SAH - Get Free Report)'s stock price was up 9.4% during trading on Thursday. The stock traded as high as $66.26 and last traded at $65.6750. Approximately 44,520 shares traded hands during trading, a decline of 84% from the average session volume of 286,390 shares. The stock had previously closed at $60.05.

Wall Street Analyst Weigh In

SAH has been the topic of a number of research reports. JPMorgan Chase & Co. reduced their target price on shares of Sonic Automotive from $72.00 to $64.00 and set an "underweight" rating on the stock in a report on Tuesday, October 6th. Bank of America raised their price target on shares of Sonic Automotive from $91.00 to $108.00 and gave the company a "buy" rating in a research note on Thursday, July 9th. Zacks Research lowered shares of Sonic Automotive from a "hold" rating to a "strong sell" rating in a report on Monday. Needham & Company LLC boosted their price objective on shares of Sonic Automotive from $90.00 to $139.00 and gave the stock a "buy" rating in a research note on Friday, July 31st. Finally, Morgan Stanley reduced their price objective on shares of Sonic Automotive from $72.00 to $57.00 and set an "underweight" rating on the stock in a research note on Monday, October 5th. Five equities research analysts have rated the stock with a Buy rating, two have assigned a Hold rating and three have given a Sell rating to the stock. According to data from MarketBeat, the company presently has an average rating of "Hold" and an average target price of $90.12.

Sonic Automotive Price Performance

The firm has a market capitalization of $2.05 billion, a P/E ratio of 10.35, a PEG ratio of 1.00 and a beta of 0.92. The company has a fifty day moving average of $72.02 and a 200 day moving average of $78.10. The company has a debt-to-equity ratio of 1.88, a current ratio of 1.01 and a quick ratio of 0.25.

Sonic Automotive (NYSE:SAH - Get Free Report) last issued its quarterly earnings results on Thursday, July 30th. The company reported $1.82 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $1.75 by $0.07. Sonic Automotive had a net margin of 1.37% and a return on equity of 20.75%. The firm had revenue of $3.93 billion for the quarter, compared to the consensus estimate of $3.78 billion. During the same quarter in the previous year, the company earned $2.19 EPS. The company's revenue for the quarter was up 7.6% on a year-over-year basis. Sell-side analysts predict that Sonic Automotive, Inc. will post 6.81 earnings per share for the current year.

Sonic Automotive Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Thursday, October 15th. Investors of record on Tuesday, September 15th will be issued a $0.41 dividend. The ex-dividend date is Tuesday, September 15th. This represents a $1.64 annualized dividend and a yield of 2.5%. Sonic Automotive's payout ratio is presently 26.16%.

Insider Buying and Selling

In other news, major shareholder Paul P. Rusnak purchased 13,701 shares of the business's stock in a transaction on Wednesday, October 7th. The shares were acquired at an average price of $59.78 per share, with a total value of $819,045.78. Following the completion of the transaction, the insider owned 5,164,221 shares of the company's stock, valued at $308,717,131.38. The trade was a 0.27% increase in their position. The purchase was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. Insiders have acquired a total of 64,221 shares of company stock worth $3,832,650 over the last quarter. Corporate insiders own 43.68% of the company's stock.

Institutional Inflows and Outflows

Several hedge funds have recently made changes to their positions in the business. A&I Financial Services LLC grew its position in shares of Sonic Automotive by 0.9% during the 2nd quarter. A&I Financial Services LLC now owns 11,755 shares of the company's stock worth $997,000 after buying an additional 109 shares during the period. CoreCap Advisors LLC increased its stake in shares of Sonic Automotive by 15.5% in the 3rd quarter. CoreCap Advisors LLC now owns 1,550 shares of the company's stock valued at $94,000 after acquiring an additional 208 shares in the last quarter. Northwestern Mutual Wealth Management Co. increased its stake in shares of Sonic Automotive by 14.5% in the 2nd quarter. Northwestern Mutual Wealth Management Co. now owns 4,594 shares of the company's stock valued at $390,000 after acquiring an additional 582 shares in the last quarter. Ameritas Advisory Services LLC acquired a new position in shares of Sonic Automotive during the 2nd quarter valued at $88,000. Finally, State of Wyoming acquired a new position in shares of Sonic Automotive during the 1st quarter valued at $79,000. 46.92% of the stock is owned by institutional investors.

About Sonic Automotive

Sonic Automotive, Inc is an automotive retailer headquartered in Charlotte, North Carolina. The company operates franchised dealerships that sell new and used cars and light trucks from a range of manufacturers, along with related automotive products and services.

Its dealership operations provide vehicle financing and insurance products, parts and maintenance services, collision repair, and other after-sales support. Sonic Automotive also operates EchoPark Automotive, a used-vehicle retail business focused on providing a broad selection of pre-owned vehicles and related services.

Founded in 1997 by automotive entrepreneur O.

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