KAR Auction downgraded to Underperform from Buy at BofA

BofA analyst John Murphy downgraded KAR Auction to Underperform from Buy with a price target of $17, down from $23. The global auto cycle is still recovering from ongoing supply chain challenges, but with visibility lacking he has a weaker near-term outlook for production, Murphy tells investors. He expects the volume environment will remain challenging in 2023 and he now projects "only a modest uptick" in the U.S. SAAR to 14.3M in 2023 from 13.7M autos in 2022, though he anticipates "a relatively steep increase" in 2024 to 16.1M. Along with his updated U.S. and global volume forecasts, he is revising estimates and price objectives across his coverage universe and rebalancing his ratings.