Sonic Automotive (NYSE:SAH) Stock Price Down 5.5% - Here's What Happened

Key Points

• Sonic Automotive shares fell 5.5% to about $60.49, well below their 50-day and 200-day moving averages, on trading volume that was 33% below average.
• Analyst sentiment remains mixed: JPMorgan cut its price target to $64 with an “underweight” rating, while Citigroup raised its target to $115 and maintained a “buy” rating. Overall, analysts rate the stock “Hold,” with an average target of $90.12.
• The company exceeded quarterly estimates with $1.82 in EPS and $3.93 billion in revenue, while maintaining a $0.41 quarterly dividend yielding about 2.7%. Insider purchases totaled roughly $4.6 million over the past three months.

Sonic Automotive, Inc. (NYSE:SAH - Get Free Report) shares traded down 5.5% during trading on Wednesday. The stock traded as low as $60.29 and last traded at $60.4880. 193,237 shares changed hands during trading, a decline of 33% from the average session volume of 287,075 shares. The stock had previously closed at $64.03.

Analysts Set New Price Targets

SAH has been the subject of several recent research reports. JPMorgan Chase & Co. reduced their price objective on Sonic Automotive from $72.00 to $64.00 and set an "underweight" rating for the company in a research note on Tuesday, October 6th. Stephens set a $89.00 target price on shares of Sonic Automotive in a research note on Monday, July 13th. Zacks Research cut shares of Sonic Automotive from a "hold" rating to a "strong sell" rating in a research note on Monday, October 12th. Citigroup upped their target price on shares of Sonic Automotive from $95.00 to $115.00 and gave the stock a "buy" rating in a report on Monday, August 3rd. Finally, Weiss Ratings upgraded shares of Sonic Automotive from a "hold (c+)" rating to a "buy (b-)" rating in a research report on Thursday, October 8th. Five analysts have rated the stock with a Buy rating, two have issued a Hold rating and three have given a Sell rating to the company. According to MarketBeat.com, the company has an average rating of "Hold" and an average target price of $90.12.

Sonic Automotive Trading Down 5.5%

The firm has a market capitalization of $1.91 billion, a price-to-earnings ratio of 9.62, a PEG ratio of 1.19 and a beta of 0.92. The company has a fifty day moving average price of $70.54 and a two-hundred day moving average price of $78.01. The company has a current ratio of 1.01, a quick ratio of 0.25 and a debt-to-equity ratio of 1.88.

Sonic Automotive (NYSE:SAH - Get Free Report) last posted its quarterly earnings results on Thursday, July 30th. The company reported $1.82 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $1.75 by $0.07. Sonic Automotive had a return on equity of 20.75% and a net margin of 1.37%. The business had revenue of $3.93 billion during the quarter, compared to analyst estimates of $3.78 billion. During the same period in the prior year, the business earned $2.19 earnings per share. The business's revenue was up 7.6% compared to the same quarter last year. As a group, research analysts forecast that Sonic Automotive, Inc. will post 6.71 earnings per share for the current fiscal year.

Sonic Automotive Dividend Announcement

The business also recently announced a quarterly dividend, which was paid on Thursday, October 15th. Shareholders of record on Tuesday, September 15th were issued a $0.41 dividend. This represents a $1.64 annualized dividend and a yield of 2.7%. The ex-dividend date was Tuesday, September 15th. Sonic Automotive's dividend payout ratio is presently 26.16%.

Insider Activity

In related news, major shareholder Paul P. Rusnak bought 12,555 shares of the business's stock in a transaction on Wednesday, October 14th. The stock was acquired at an average cost of $59.90 per share, with a total value of $752,044.50. Following the purchase, the insider directly owned 5,176,776 shares of the company's stock, valued at $310,088,882.40. The trade was a 0.24% increase in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. Over the last three months, insiders acquired 76,776 shares of company stock valued at $4,584,694. 43.68% of the stock is owned by company insiders.

Institutional Investors Weigh In On Sonic Automotive

A number of hedge funds have recently modified their holdings of SAH. Hsbc Holdings PLC lifted its holdings in Sonic Automotive by 106.2% in the second quarter. Hsbc Holdings PLC now owns 27,871 shares of the company's stock valued at $2,328,000 after acquiring an additional 14,352 shares during the last quarter. Dimensional Fund Advisors LP grew its position in Sonic Automotive by 3.8% in the first quarter. Dimensional Fund Advisors LP now owns 1,313,857 shares of the company's stock worth $90,088,000 after acquiring an additional 48,599 shares during the period. First Trust Advisors LP grew its position in Sonic Automotive by 80.5% in the first quarter. First Trust Advisors LP now owns 37,576 shares of the company's stock worth $2,577,000 after acquiring an additional 16,753 shares during the period. Empowered Funds LLC increased its stake 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 acquiring an additional 51,420 shares during the last quarter. Finally, Denali Advisors LLC acquired a new stake in Sonic Automotive during the second quarter worth $4,799,000. Hedge funds and other institutional investors own 46.92% of the company's stock.

Sonic Automotive Company Profile

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.

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