Sonic Automotive, Inc. (NYSE:SAH) Receives Average Recommendation of "Moderate Buy" from Analysts

Key Points

• Sonic Automotive has received an average recommendation of "Moderate Buy" from eight analyst brokerages, with a target price of $77.86.
• The company recently surpassed earnings expectations, reporting $2.19 EPS for the quarter, significantly beating analysts' estimates of $1.63.
• Sonic Automotive will increase its quarterly dividend from $0.35 to $0.38 per share, representing a yield of 2.0% and a payout ratio of 31.11%.

Sonic Automotive, Inc. (NYSE:SAH - Get Free Report) has earned an average rating of "Moderate Buy" from the eight ratings firms that are covering the firm, Marketbeat reports. One analyst has rated the stock with a sell recommendation, three have issued a hold recommendation, three have assigned a buy recommendation and one has assigned a strong buy recommendation to the company. The average 12 month price target among brokerages that have covered the stock in the last year is $77.8571.

A number of research firms recently commented on SAH. Citigroup initiated coverage on Sonic Automotive in a report on Wednesday, April 23rd. They issued a "neutral" rating and a $64.00 price objective for the company. JPMorgan Chase & Co. reaffirmed an "underweight" rating and issued a $72.00 price target (up from $65.00) on shares of Sonic Automotive in a research note on Thursday, July 17th. Benchmark increased their price target on shares of Sonic Automotive from $76.00 to $80.00 and gave the company a "buy" rating in a research report on Friday, July 25th. Bank of America boosted their price objective on shares of Sonic Automotive from $80.00 to $94.00 and gave the company a "buy" rating in a report on Monday, June 16th. Finally, Stephens downgraded shares of Sonic Automotive from an "overweight" rating to an "equal weight" rating and upped their target price for the company from $72.00 to $82.00 in a research note on Thursday, July 17th.

Insider Activity

In related news, President Jeff Dyke sold 576 shares of the business's stock in a transaction on Monday, June 2nd. The shares were sold at an average price of $70.02, for a total value of $40,331.52. Following the sale, the president directly owned 605,393 shares of the company's stock, valued at approximately $42,389,617.86. The trade was a 0.10% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. Insiders have sold a total of 50,000 shares of company stock worth $3,502,062 over the last ninety days. 42.65% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently modified their holdings of the company. Creative Planning acquired a new stake in Sonic Automotive in the 2nd quarter valued at $213,000. Commonwealth of Pennsylvania Public School Empls Retrmt SYS acquired a new position in shares of Sonic Automotive during the 2nd quarter worth about $297,000. Islay Capital Management LLC bought a new position in shares of Sonic Automotive in the 2nd quarter valued at about $1,143,000. ProShare Advisors LLC acquired a new stake in shares of Sonic Automotive in the second quarter valued at about $6,564,000. Finally, Bryce Point Capital LLC bought a new stake in Sonic Automotive during the second quarter worth about $793,000. 46.92% of the stock is owned by institutional investors and hedge funds.

Sonic Automotive Trading Up 1.8%

Sonic Automotive stock traded up $1.34 during trading hours on Thursday, reaching $74.40. 166,816 shares of the company's stock traded hands, compared to its average volume of 230,133. Sonic Automotive has a fifty-two week low of $52.00 and a fifty-two week high of $89.62. The firm's 50 day moving average is $78.30 and its 200-day moving average is $69.87. The company has a debt-to-equity ratio of 1.78, a quick ratio of 0.24 and a current ratio of 1.03. The firm has a market capitalization of $2.54 billion, a price-to-earnings ratio of 16.53 and a beta of 0.99.

Sonic Automotive (NYSE:SAH - Get Free Report) last released its earnings results on Thursday, July 24th. The company reported $2.19 EPS for the quarter, topping analysts' consensus estimates of $1.63 by $0.56. The firm had revenue of $3.66 billion during the quarter, compared to analyst estimates of $3.66 billion. Sonic Automotive had a net margin of 1.07% and a return on equity of 21.40%. The business's quarterly revenue was up 5.9% compared to the same quarter last year. During the same quarter in the previous year, the business earned $1.47 EPS. On average, analysts predict that Sonic Automotive will post 6.14 earnings per share for the current year.

Sonic Automotive Increases Dividend

The business also recently declared a quarterly dividend, which will be paid on Wednesday, October 15th. Stockholders of record on Monday, September 15th will be issued a $0.38 dividend. This represents a $1.52 annualized dividend and a dividend yield of 2.0%. This is a boost from Sonic Automotive's previous quarterly dividend of $0.35. The ex-dividend date is Monday, September 15th. Sonic Automotive's dividend payout ratio is currently 33.78%.

Sonic Automotive Company Profile

Sonic Automotive, Inc operates as an automotive retailer in the United States. It operates in three segments, Franchised Dealerships, EchoPark, and Powersports. The Franchised Dealerships segment is involved in the sale of new and used cars and light trucks, and replacement parts; provision of vehicle maintenance, manufacturer warranty repair, and paint and collision repair services; and arrangement of extended warranties, service contracts, financing, insurance, and other aftermarket products for its guests.