JPMorgan downgrades Sonic to Underweight on ‘tough road ahead’

JPMorgan downgraded Sonic Automotive to Underweight from Neutral with a price target of $50, down from $52. The firm continues to see a “tough road ahead” for EchoPark recovery and its estimates remain the lowest relative to consensus in the peer group. While EchoPark’s Q3 results were better than expected, particularly on the volume ramp despite store closures, the path to breakeven at EchoPark in Q1 of 2024 is still dependent heavily on industry variables, particularly quicker recovery in supply and pricing, the analyst tells investors in a research note.