Sonic Automotive (NYSE:SAH) Shares Gap Down - What's Next?

Key Points

• Sonic Automotive shares gapped down at the open, falling from a prior close of $83.65 to $78.44 before trading around $79.54.
• Analyst sentiment remains mixed, with a consensus Hold rating and an average price target of $81.63, though Citigroup recently raised its target to $95 and kept a Buy rating.
• The company posted better-than-expected EPS of $1.62 on revenue of $3.69 billion, and it also raised its quarterly dividend to $0.41 per share from $0.38.

Sonic Automotive, Inc. (NYSE:SAH - Get Free Report) gapped down before the market opened on Thursday . The stock had previously closed at $83.65, but opened at $78.44. Sonic Automotive shares last traded at $79.5350, with a volume of 26,960 shares traded.

Wall Street Analysts Forecast Growth

SAH has been the topic of several research analyst reports. Citigroup raised their target price on Sonic Automotive from $82.00 to $95.00 and gave the stock a "buy" rating in a research report on Monday, May 11th. JPMorgan Chase & Co. boosted their target price on Sonic Automotive from $67.00 to $77.00 and gave the company an "underweight" rating in a report on Thursday, May 7th. Stephens reduced their target price on Sonic Automotive from $68.00 to $67.00 and set an "equal weight" rating for the company in a report on Thursday, February 19th. Zacks Research raised Sonic Automotive from a "strong sell" rating to a "hold" rating in a report on Tuesday, April 28th. Finally, Morgan Stanley set a $72.00 price objective on Sonic Automotive in a research note on Thursday, May 7th. Four analysts have rated the stock with a Buy rating, six have given a Hold rating and one has given a Sell rating to the company's stock. According to data from MarketBeat.com, the company presently has an average rating of "Hold" and a consensus target price of $81.63.

Sonic Automotive Trading Up 1.8%

The company has a 50 day simple moving average of $76.62 and a 200 day simple moving average of $67.78. The company has a current ratio of 1.03, a quick ratio of 0.29 and a debt-to-equity ratio of 1.93. The stock has a market capitalization of $2.51 billion, a PE ratio of 25.32, a P/E/G ratio of 1.92 and a beta of 0.88.

Sonic Automotive (NYSE:SAH - Get Free Report) last posted its quarterly earnings data on Thursday, April 30th. The company reported $1.62 EPS for the quarter, beating the consensus estimate of $1.40 by $0.22. The firm had revenue of $3.69 billion during the quarter, compared to the consensus estimate of $3.73 billion. Sonic Automotive had a return on equity of 22.45% and a net margin of 0.72%.The firm's revenue was up 1.0% compared to the same quarter last year. During the same period in the prior year, the business earned $1.48 EPS. Analysts predict that Sonic Automotive, Inc. will post 6.92 earnings per share for the current fiscal year.

Sonic Automotive Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Wednesday, July 15th. Stockholders of record on Monday, June 15th will be paid a dividend of $0.41 per share. This is a positive change from Sonic Automotive's previous quarterly dividend of $0.38. The ex-dividend date of this dividend is Monday, June 15th. This represents a $1.64 dividend on an annualized basis and a dividend yield of 2.1%. Sonic Automotive's dividend payout ratio (DPR) is currently 52.23%.

Insider Activity

In other news, President Jeff Dyke sold 50,000 shares of the 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 completion of the transaction, the president directly owned 111,622 shares of the company's stock, valued at approximately $9,261,277.34. This represents a 30.94% decrease in their position. The sale was disclosed in a filing with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders sold 100,000 shares of company stock worth $8,408,160. Corporate insiders own 43.68% of the company's stock.

Hedge Funds Weigh In On Sonic Automotive

A number of large investors have recently modified their holdings of SAH. Royal Bank of Canada raised its stake in shares of Sonic Automotive by 37.1% during the 1st quarter. Royal Bank of Canada now owns 13,946 shares of the company's stock worth $795,000 after buying an additional 3,777 shares in the last quarter. AQR Capital Management LLC raised its stake in shares of Sonic Automotive by 13.6% during the 1st quarter. AQR Capital Management LLC now owns 23,310 shares of the company's stock worth $1,328,000 after buying an additional 2,793 shares in the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. raised its stake in shares of Sonic Automotive by 5.8% during the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 8,853 shares of the company's stock worth $504,000 after buying an additional 483 shares in the last quarter. Goldman Sachs Group Inc. raised its stake in shares of Sonic Automotive by 124.9% during the 1st quarter. Goldman Sachs Group Inc. now owns 355,328 shares of the company's stock worth $20,239,000 after buying an additional 197,336 shares in the last quarter. Finally, UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC raised its stake in shares of Sonic Automotive by 15.8% during the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 38,698 shares of the company's stock worth $2,204,000 after buying an additional 5,286 shares in the last quarter. 46.92% of the stock is owned by hedge funds and other 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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