Asbury (ABG) has received a new Buy rating, initiated by Bank of America Securities analyst, John Murphy.
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John Murphy has given his Buy rating due to a combination of factors that highlight Asbury’s strong financial performance and strategic growth initiatives. Asbury reported a solid first quarter with adjusted earnings per share surpassing market expectations, driven by robust new vehicle sales despite a sequential decline in new vehicle gross profit per unit. The company’s acquisition of Herb Chambers Companies is seen as a transformative move, expected to significantly increase Asbury’s revenue and expand its market presence, particularly in the luxury segment and the New England region.
Furthermore, Asbury’s same-store sales showed resilience, with new vehicle sales contributing positively to overall performance. The company’s gross margins, while showing a year-over-year decline, improved sequentially, particularly in the used vehicle segment. Additionally, Asbury’s efficient cost management, as evidenced by its leading position in SG&A performance relative to peers, further supports the positive outlook. These factors, combined with a favorable view of the auto industry amidst policy and regulatory changes, underpin the Buy rating and the price objective of $325.
ABG’s price has also changed moderately for the past six months – from $260.030 to $229.710, which is a -11.66% drop .