Sonic Automotive, the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Michael Albanese from Benchmark Co. maintained a Buy rating on the stock and has a $76.00 price target.
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Michael Albanese has given his Buy rating due to a combination of factors that highlight Sonic Automotive’s strategic growth and market positioning. The acquisition of four Jaguar Land Rover dealerships in California significantly boosts Sonic’s annual sales by approximately $500 million, enhancing its presence in a lucrative luxury market. This expansion not only increases Sonic’s national footprint to 177 franchises but also positions the company as the largest U.S. retailer of Jaguar Land Rover vehicles.
Furthermore, the acquisition aligns with the industry’s shift towards electric vehicles, as Jaguar transitions to fully electric models. The California market is particularly favorable for this transition, providing Sonic with a strategic advantage. Additionally, the strong customer loyalty associated with luxury brands like Land Rover, coupled with high average selling prices, supports stable gross profit margins and healthy aftersales revenue. These factors collectively underpin the Buy rating, reflecting confidence in Sonic Automotive’s ability to capitalize on these growth opportunities.
In another report released on June 16, Bank of America Securities also maintained a Buy rating on the stock with a $94.00 price target.