AutoNation attracts a buy rating from Argus with tech investments seen paying off

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Argus launched coverage on AutoNation (NYSE:AN) with a Buy rating.

Analysts Taylor Conrad and Rachel Cheng called AutoNation (AN) well positioned for the future of car buying.

“In particular, AutoNation’s omnichannel approach, which integrates online and in-store purchasing, gives customers the ability to buy a car on their own terms. This differentiates AutoNation from online-only and in-store-only retailers and has enabled it to boost market share.”

The firm has a favorable view of the investments made by AutoNation (AN) in technology and expects the increased emphasis on customer self-service to boost sales and margins.

AutoNation (AN) is seen as being attractively valued at the current price, which is noted to be 5X the firm’s 2023 EPS estimate vs. the peer average of 8X. While the price-book multiple is higher than the peer average, Argus believes that AN merits a higher valuation based on the company’s strong balance sheet, experienced management team, and emphasis on omnichannel sales and customer self-service. Argus’ price target on AN of $150, implying a multiple of 6X the 2023 EPS estimate.

Shares of AutoNation (AN) moved up 0.14% premarket to $124.59.

The Seeking Alpha Quant Rating on AN recently moved up Hold from Strong Buy.

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