Federico Merendi, an analyst from Bank of America Securities, maintained the Buy rating on AutoNation. The associated price target remains the same with $250.00.
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Federico Merendi has given his Buy rating due to a combination of factors that highlight AutoNation’s strong financial performance and strategic initiatives. The company reported an adjusted EPS for the third quarter that exceeded both Bank of America’s and market consensus estimates, driven by robust same-store sales across all segments. This performance indicates a healthy demand and effective operational execution, despite a slight miss in total gross margin.
Additionally, AutoNation’s focus on capital allocation through share buybacks and mergers and acquisitions further supports the Buy rating. The company has demonstrated strong free cash flow generation, allowing it to repurchase a significant amount of shares and invest in acquisitions. These strategic moves are expected to enhance shareholder value and support future growth, justifying the optimistic outlook reflected in the Buy rating.
Merendi covers the Consumer Cyclical sector, focusing on stocks such as Ford Motor, AutoNation, and Mobileye Global, Inc. Class A. According to TipRanks, Merendi has an average return of 2.8% and a 60.00% success rate on recommended stocks.
In another report released on October 14, Morgan Stanley also maintained a Buy rating on the stock with a $220.00 price target.