Sonic Automotive downgraded to Equal Weight at Stephens ahead of Q2 earnings

Stephens downgraded Sonic Automotive (SAH) to Equal Weight from Overweight with a price target of $82, up from $72. The premise of its prior Overweight rating was that Sonic deserved the same multiple as the other public six franchised auto dealer constituents and with this multiple normalization having largely occurred the firm “can’t justify a high enough” 12-month price target based on its earnings estimates and normalized multiple to retain an Overweight rating on the shares, the analyst tells investors in a preview for the group ahead of earnings. The firm believes that Q2 was “a good quarter” for the P6 group on balance, the analyst added.