Sonic Automotive, the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Chris Pierce from Needham reiterated a Buy rating on the stock and has a $90.00 price target.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Chris Pierce has given his Buy rating due to a combination of factors including the robust performance of Sonic Automotive’s franchise business, which continues to outperform expectations. Despite the volatility faced by EchoPark, particularly in the context of a challenging used auto market recovery, the long-term outlook remains positive.
Sonic Automotive’s exposure to premium brands and the unique EchoPark model are expected to drive unit growth over time, with minimal risk from subprime exposure. The valuation reflects a $7.4 billion enterprise value, with the franchise business valued at $6.8 billion and EchoPark at $600 million, adjusted for expected EBITDA. The price target has been adjusted to $90, factoring in a 20% discount due to EchoPark’s share of the enterprise value and near-term execution challenges.
According to TipRanks, Pierce is an analyst with an average return of -0.6% and a 41.92% success rate. Pierce covers the Consumer Cyclical sector, focusing on stocks such as Sonic Automotive, Rivian Automotive, and Carvana Co.