AutoNation (AN) closed at $60.16 in the latest trading session, marking a +1.91% move from the prior day. This change outpaced the S&P 500’s 1.74% gain on the day. Elsewhere, the Dow gained 1.91%, while the tech-heavy Nasdaq added 1.88%.
Prior to today’s trading, shares of the auto retailer had gained 5.17% over the past month. This has outpaced the Retail-Wholesale sector’s loss of 0.78% and the S&P 500’s loss of 1.86% in that time.
Investors will be hoping for strength from AN as it approaches its next earnings release. The company is expected to report EPS of $1.52, up 28.81% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.20 billion, down 4.79% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.52 per share and revenue of $19.94 billion. These totals would mark changes of +21.32% and -6.52%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for AN. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.15% higher. AN currently has a Zacks Rank of #2 (Buy).
Digging into valuation, AN currently has a Forward P/E ratio of 10.69. This valuation marks a discount compared to its industry’s average Forward P/E of 12.72.
It is also worth noting that AN currently has a PEG ratio of 1.33. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. Automotive – Retail and Whole Sales stocks are, on average, holding a PEG ratio of 1.56 based on yesterday’s closing prices.
The Automotive – Retail and Whole Sales industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 4, which puts it in the top 2% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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