Bank of America Elevates Sonic Automotive to Buy Status with Increased Price Target

Investors in Sonic Automotive Inc. received recent news that Bank of America has shifted its perspective on the automotive retailer's stock. Previously rated as 'underperform,' Sonic Automotive (NYSE:SAH) now boasts a 'buy' rating from the financial institution. Following this reassessment, which was announced on Friday, Bank of America issued a research note revealing a new price objective for the company's shares. They set a target of $68.00, escalating from the former $55.00 objective. Reports indicate that this new price target implies a potential 9.15% increase from the stock's recent closing value.

Analyst Insights on Sonic Automotive

Analysis of Sonic Automotive's stock has been a mixed bag, with several equity analysts modifying their stances. A downgrade from 'buy' to 'hold' was executed by StockNews.com, as highlighted in a report dated January 11th. On a more positive note, Morgan Stanley raised its price target for Sonic Automotive from $35.00 to $40.00, though it retained an 'underweight' rating on the stock. Meanwhile, TheStreet offered an upgraded evaluation, boosting the company's shares from a 'c+' to a 'b' rating on March 6th. In the grand tapestry of stock ratings, two analysts have recommended selling Sonic Automotive's stock, one has suggested holding, and two are advocating for a buy, according to MarketBeat.com. The consensus target price settled at $56.00 amongst these ratings.

Market Performance and Corporate Earnings

Sonic Automotive's stock opened at $62.30 on the market this Friday. The company's financial structure includes a quick ratio of 0.41, a current ratio of 1.10, and a debt-to-equity ratio of 2.10. With a market capitalization of $2.12 billion, a price-to-earnings ratio sitting at 12.77, and a beta of 1.82, the company shows substantial market presence. Furthermore, the stock's 52-week range has seen a low of $39.02 and a high of $64.68. Notably, it has been lingering around a fifty-day simple moving average of $52.53 and a two-hundred-day simple moving average of $52.06.

Sonic Automotive's latest quarterly earnings report, dated April 25th, exhibited an earnings per share (EPS) of $1.36. This figure surpassed the consensus estimate of $1.23 by $0.13. Although the company's revenue of $3.40 billion for the quarter fell slightly short of the anticipated $3.45 billion, the automaker demonstrated a net margin of 1.21% and a return on equity of 27.69%. When compared to the same quarter in the previous year, revenue was down by 2.6%, but the company was able to maintain a positive earnings growth with an EPS during the same period last year of $1.33. Looking ahead, analysts expect Sonic Automotive to post an EPS of 5.62 for the current fiscal year.

Institutional Interest in Sonic Automotive

Several hedge funds and institutional investors have adjusted their investment positions in Sonic Automotive recently. For instance, Westwood Holdings Group Inc. took on new shares valued at approximately $31,473,000 in the fourth quarter. Jacobs Levy Equity Management Inc. saw a significant upsurge in their Sonic Automotive shareholdings, boasting an increase of 1,841.9% during the third quarter. Other notable movements include Schonfeld Strategic Advisors LLC's 705.8% increase and new stakes acquired by Assenagon Asset Management S.A. and Quadrature Capital Ltd, valued at around $1,770,000 and $1,724,000 respectively in the fourth quarter. Hedge funds and institutional investors currently own 46.92% of Sonic Automotive's stock.

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