Sonic Automotive (NYSE:SAH) Trading Up 6.6% After Analyst Upgrade

Key Points

• Sonic Automotive shares rose 6.6% after Barclays increased its price target from $77 to $92, though the firm kept an equal-weight rating.
• Other analysts also turned more positive, with UBS and Bank of America raising targets and issuing buy ratings; the stock’s current consensus rating remains Hold with an average price target of $90.67.
• The company recently reported better-than-expected earnings of $1.62 per share and also raised its quarterly dividend to $0.41 per share from $0.38.

Shares of Sonic Automotive, Inc. (NYSE:SAH - Get Free Report) rose 6.6% during mid-day trading on Wednesday after Barclays raised their price target on the stock from $77.00 to $92.00. Barclays currently has an equal weight rating on the stock. Sonic Automotive traded as high as $97.46 and last traded at $98.4660. Approximately 90,588 shares changed hands during trading, a decline of 67% from the average session volume of 277,802 shares. The stock had previously closed at $92.38.

A number of other research analysts also recently issued reports on the company. UBS Group raised their price target on Sonic Automotive from $90.00 to $109.00 and gave the stock a "buy" rating in a research note on Friday. Morgan Stanley set a $72.00 price objective on Sonic Automotive in a report on Thursday, May 7th. Zacks Research upgraded shares of Sonic Automotive from a "strong sell" rating to a "hold" rating in a research report on Tuesday, April 28th. Bank of America lifted their target price on shares of Sonic Automotive from $91.00 to $108.00 and gave the company a "buy" rating in a report on Thursday, July 9th. Finally, Citigroup upped their price target 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 assigned a Sell rating to the company. Based on data from MarketBeat, Sonic Automotive currently has an average rating of "Hold" and a consensus price target of $90.67.

Insider Buying and Selling

In other Sonic Automotive news, President Jeff Dyke sold 35,114 shares of the company's stock in a transaction that occurred on Wednesday, June 10th. The stock was sold at an average price of $85.22, for a total transaction of $2,992,415.08. Following the completion of the sale, the president directly owned 543,668 shares of the company's stock, valued at $46,331,386.96. This represents a 6.07% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. 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. 43.68% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Sonic Automotive

Several hedge funds have recently modified their holdings of the stock. Northwestern Mutual Wealth Management Co. raised its position in Sonic Automotive by 992.5% during the 2nd quarter. Northwestern Mutual Wealth Management Co. now owns 437 shares of the company's stock worth $35,000 after buying an additional 397 shares during the last quarter. Camelot Portfolios LLC acquired a new position in shares of Sonic Automotive during the fourth quarter worth about $41,000. Torren Management LLC acquired a new position in shares of Sonic Automotive during the fourth quarter worth about $50,000. National Bank of Canada FI purchased a new position in Sonic Automotive during the third quarter worth about $78,000. Finally, State of Wyoming acquired a new stake in Sonic Automotive in the first quarter valued at about $79,000. 46.92% of the stock is owned by institutional investors and hedge funds.

Sonic Automotive Price Performance

The stock has a fifty day simple moving average of $82.42 and a two-hundred day simple moving average of $70.60. The company has a market cap of $3.12 billion, a PE ratio of 31.44, a price-to-earnings-growth ratio of 1.38 and a beta of 0.89. The company has a current ratio of 1.03, a quick ratio of 0.29 and a debt-to-equity ratio of 1.93.

Sonic Automotive (NYSE:SAH - Get Free Report) last issued its earnings results on Thursday, April 30th. The company reported $1.62 earnings per share (EPS) for the quarter, topping analysts' consensus estimates 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 the consensus estimate of $3.73 billion. During the same period in the prior year, the business posted $1.48 EPS. The company's revenue for the quarter was up 1.0% on a year-over-year basis. On average, equities analysts predict that Sonic Automotive, Inc. will post 6.94 EPS for the current fiscal year.

Sonic Automotive Increases Dividend

The business also recently announced a quarterly dividend, which will be paid on Wednesday, July 15th. Shareholders of record on Monday, June 15th will be given a dividend of $0.41 per share. This represents a $1.64 annualized dividend and a dividend yield of 1.7%. The ex-dividend date is Monday, June 15th. This is an increase from Sonic Automotive's previous quarterly dividend of $0.38. Sonic Automotive's payout ratio is presently 52.23%.

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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