Sonic Automotive (NYSE:SAH) Trading 6.7% Higher - Here's Why

Key Points

• Sonic Automotive shares jumped 6.7% to about $111.73, reaching a session high of $112.32, despite trading volume falling 92% below its average.
• Analyst sentiment is mixed but improving: Bank of America and UBS raised their price targets and maintained Buy ratings, while the overall consensus remains “Hold” with an average target of $90.67.
• The company exceeded quarterly EPS expectations, reporting $1.62 versus the $1.40 consensus estimate, and increased its quarterly dividend to $0.41 from $0.38, producing a 1.5% yield.

Sonic Automotive, Inc. (NYSE:SAH - Get Free Report) shot up 6.7% on Wednesday . The stock traded as high as $112.32 and last traded at $111.73. 22,457 shares changed hands during trading, a decline of 92% from the average session volume of 274,341 shares. The stock had previously closed at $104.69.

Analyst Ratings Changes

A number of brokerages have recently weighed in on SAH. Morgan Stanley set a $72.00 price target on Sonic Automotive in a report on Thursday, May 7th. Bank of America lifted their target price on Sonic Automotive from $91.00 to $108.00 and gave the company a "buy" rating in a research note on Thursday, July 9th. UBS Group upped their target price on Sonic Automotive from $90.00 to $109.00 and gave the company a "buy" rating in a report on Friday, July 10th. Zacks Research upgraded shares of Sonic Automotive from a "strong sell" rating to a "hold" rating in a report on Tuesday, April 28th. Finally, Citigroup boosted their price objective on shares of Sonic Automotive from $82.00 to $95.00 and gave the company a "buy" rating in a research report on Monday, May 11th. Five investment analysts have rated the stock with a Buy rating, five have given a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, the stock has an average rating of "Hold" and an average target price of $90.67.

Sonic Automotive Price Performance

The stock has a 50 day moving average price of $87.01 and a two-hundred day moving average price of $73.24. The company has a debt-to-equity ratio of 1.93, a quick ratio of 0.29 and a current ratio of 1.03. The company has a market capitalization of $3.49 billion, a PE ratio of 35.28, a P/E/G ratio of 1.58 and a beta of 0.89.

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

Sonic Automotive Increases Dividend

The firm also recently announced a quarterly dividend, which was paid on Wednesday, July 15th. Shareholders of record on Monday, June 15th were given a $0.41 dividend. This is a positive change from Sonic Automotive's previous quarterly dividend of $0.38. This represents a $1.64 annualized dividend and a yield of 1.5%. The ex-dividend date of this dividend was Monday, June 15th. Sonic Automotive's payout ratio is presently 52.23%.

Insider Activity at Sonic Automotive

In other news, President Jeff Dyke sold 50,000 shares of the firm's stock in a transaction on Monday, June 8th. The shares were 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 trade represents a 30.94% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders have 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

Several hedge funds have recently bought and sold shares of the business. A&I Financial Services LLC raised its holdings in Sonic Automotive by 0.9% during the second quarter. A&I Financial Services LLC now owns 11,755 shares of the company's stock valued at $997,000 after buying an additional 109 shares in the last quarter. Hennion & Walsh Asset Management Inc. acquired a new position in shares of Sonic Automotive during the 2nd quarter valued at about $208,000. Empowered Funds LLC raised its stake in shares of Sonic Automotive by 64.4% in the 1st quarter. Empowered Funds LLC now owns 131,302 shares of the company's stock valued at $9,003,000 after acquiring an additional 51,420 shares in the last quarter. Quantinno Capital Management LP raised its stake in shares of Sonic Automotive by 13.3% in the 1st quarter. Quantinno Capital Management LP now owns 10,043 shares of the company's stock valued at $689,000 after acquiring an additional 1,178 shares in the last quarter. Finally, Renaissance Technologies LLC lifted its holdings in Sonic Automotive by 11.5% in the 1st quarter. Renaissance Technologies LLC now owns 88,126 shares of the company's stock worth $6,043,000 after purchasing an additional 9,100 shares during the last quarter. 46.92% of the stock is owned by institutional investors and hedge funds.

Sonic Automotive Company Profile

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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