Sonic Automotive, the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Chris Pierce from Needham reiterated a Buy rating on the stock and has a $90.00 price target.
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Chris Pierce has given his Buy rating due to a combination of factors tied to Sonic Automotive’s cash generation profile and valuation. He views the company’s core franchised dealership operations, which focus on premium original equipment manufacturers, as producing durable cash flows supported by high-margin service, parts, and finance and insurance activities. In his view, these steady, higher-margin revenue streams help offset cyclicality in vehicle sales and support a favorable long‑term risk/reward profile.
Pierce also sees additional upside potential from EchoPark, Sonic’s used-car platform, as inventory sourcing improves and its pricing capabilities help it benefit from a normalizing pre-owned market. His $90 price target is based on a sum-of-the-parts approach that applies a discounted EBITDA multiple to the franchise dealership segment and a separate multiple to EchoPark, then incorporates an overall holding company discount reflecting EchoPark’s share of total enterprise value. Even with a more conservative valuation for EchoPark and a higher conglomerate discount, the implied enterprise value still supports a target price meaningfully above current levels, reinforcing his Buy recommendation.
According to TipRanks, Pierce is an analyst with an average return of 0.0% and a 43.19% success rate. Pierce covers the Consumer Cyclical sector, focusing on stocks such as Carvana Co, CarMax, and Sonic Automotive.