Citi has initiated coverage on Sonic Automotive (SAH, Financial) with a Neutral rating and set a price target of $64. The coverage comes amidst potential volatility in U.S. light vehicle sales, primarily due to ongoing tariff disputes. Despite this uncertainty, recent sales figures have exceeded expectations, and the positive trend continued into April.
The bank's analyst suggests that once the current trade tensions subside, demographic trends in the U.S. are likely to drive annual car sales to between 16 and 18 million units. This projection represents roughly a 10% increase over anticipated 2024 sales figures. Additionally, Citi notes that replenishing inventory levels could boost production, which would benefit the auto sector financially.
Citi also believes that auto dealers, such as Sonic Automotive (SAH, Financial), are well-positioned to handle any fluctuations brought about by the current market uncertainty. This positioning could offer them a strategic advantage in the industry as conditions stabilize.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for Sonic Automotive Inc (SAH, Financial) is $74.83 with a high estimate of $93.00 and a low estimate of $60.00. The average target implies an upside of 25.24% from the current price of $59.75. More detailed estimate data can be found on the Sonic Automotive Inc (SAH) Forecast page.
Based on the consensus recommendation from 8 brokerage firms, Sonic Automotive Inc's (SAH, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Sonic Automotive Inc (SAH, Financial) in one year is $59.08, suggesting a downside of 1.12% from the current price of $59.75. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Sonic Automotive Inc (SAH) Summary page.
