Sonic Automotive (NYSE:SAH) Reaches New 12-Month High - Time to Buy?

Key Points

• Sonic Automotive shares reached a new 52-week high, trading around $105, well above the analyst consensus price target of $90.67. Despite five Buy ratings, the overall consensus remains Hold.
• The company exceeded quarterly earnings expectations, reporting $1.62 EPS versus the $1.40 estimate, although revenue of $3.69 billion fell slightly short of forecasts. Analysts expect full-year EPS of approximately $6.93.
• Sonic Automotive raised its quarterly dividend to $0.41 per share, equal to a $1.64 annualized payout and a 1.6% yield. Insiders sold 100,000 shares during the last quarter, while institutional investors own 46.92% of the stock.

Sonic Automotive, Inc. (NYSE:SAH - Get Free Report)'s stock price hit a new 52-week high during mid-day trading on Tuesday . The company traded as high as $104.91 and last traded at $105.0460, with a volume of 2681 shares trading hands. The stock had previously closed at $99.82.

Analysts Set New Price Targets

A number of equities research analysts have recently weighed in on SAH shares. Zacks Research raised Sonic Automotive from a "strong sell" rating to a "hold" rating in a research note on Tuesday, April 28th. Stephens set a $89.00 price objective on Sonic Automotive in a research report on Monday, July 13th. Barclays raised their target price on shares of Sonic Automotive from $77.00 to $92.00 and gave the stock an "equal weight" rating in a report on Wednesday, July 15th. Bank of America lifted their target price on shares of Sonic Automotive from $91.00 to $108.00 and gave the stock a "buy" rating in a research note on Thursday, July 9th. Finally, Needham & Company LLC reissued a "buy" rating and set a $90.00 price target on shares of Sonic Automotive in a research report on Tuesday, March 31st. Five equities research analysts have rated the stock with a Buy rating, five have issued a Hold rating and one has given a Sell rating to the stock. According to MarketBeat.com, Sonic Automotive presently has a consensus rating of "Hold" and an average price target of $90.67.

Sonic Automotive Price Performance

The business has a 50 day moving average of $86.38 and a 200 day moving average of $72.94. The company has a market cap of $3.27 billion, a PE ratio of 33.30, a price-to-earnings-growth ratio of 1.53 and a beta of 0.89. The company has a debt-to-equity ratio of 1.93, a current ratio of 1.03 and a quick ratio of 0.29.

Sonic Automotive (NYSE:SAH - Get Free Report) last released its quarterly earnings results on Thursday, April 30th. The company reported $1.62 earnings per share for the quarter, beating the consensus estimate of $1.40 by $0.22. The business had revenue of $3.69 billion for the quarter, compared to analysts' expectations of $3.73 billion. Sonic Automotive had a net margin of 0.72% and a return on equity of 22.45%. The firm's revenue for the quarter was up 1.0% compared to the same quarter last year. During the same quarter in the previous year, the business posted $1.48 earnings per share. As a group, research analysts predict that Sonic Automotive, Inc. will post 6.93 EPS for the current year.

Sonic Automotive Increases Dividend

The company also recently disclosed a quarterly dividend, which was paid on Wednesday, July 15th. Shareholders of record on Monday, June 15th were given a dividend of $0.41 per share. This represents a $1.64 annualized dividend and a yield of 1.6%. The ex-dividend date of this dividend was Monday, June 15th. This is a positive change from Sonic Automotive's previous quarterly dividend of $0.38. Sonic Automotive's payout ratio is presently 52.23%.

Insider Buying and Selling at Sonic Automotive

In other Sonic Automotive news, President Jeff Dyke sold 50,000 shares of the company's stock in a transaction that occurred on Monday, June 8th. The stock was sold at an average price of $82.97, for a total transaction of $4,148,500.00. Following the transaction, the president owned 111,622 shares in the company, valued at approximately $9,261,277.34. This represents a 30.94% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders sold 100,000 shares of company stock worth $8,408,160. 43.68% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Sonic Automotive

Several hedge funds have recently made changes to their positions in the company. Northwestern Mutual Wealth Management Co. raised its holdings in Sonic Automotive by 992.5% in the second quarter. Northwestern Mutual Wealth Management Co. now owns 437 shares of the company's stock worth $35,000 after purchasing an additional 397 shares in the last quarter. Camelot Portfolios LLC bought a new stake in shares of Sonic Automotive during the 4th quarter valued at $41,000. Torren Management LLC purchased a new stake in shares of Sonic Automotive in the 4th quarter worth about $50,000. National Bank of Canada FI bought a new position in shares of Sonic Automotive in the 3rd quarter worth about $78,000. Finally, State of Wyoming bought a new position in shares of Sonic Automotive in the 1st quarter worth about $79,000. 46.92% of the stock is currently owned by institutional investors.

About Sonic Automotive

Sonic Automotive, Inc is a publicly traded automotive retailer that operates a network of franchised new-car dealerships and used-vehicle dealerships across the United States. Headquartered in Charlotte, North Carolina, the company offers a range of services that include vehicle sales, leasing, finance and insurance products, service and parts, and collision repair. Sonic Automotive's dealerships represent numerous major automotive brands, and the company also markets a broad selection of pre-owned vehicles under its own banner.

In addition to its core dealership operations, Sonic Automotive has developed digital retail capabilities that allow customers to research, shop and complete transactions online.

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