AutoNation, Inc. (AN) Stock Price Up 13.8% on Better-Than-Expected Earnings

AutoNation, Inc. (NYSE:AN) shares shot up 13.8% during mid-day trading on Friday after the company announced better than expected quarterly earnings. The company traded as high as $55.77 and last traded at $54.17. 1,434,073 shares were traded during mid-day trading, an increase of 30% from the average session volume of 1,103,540 shares. The stock had previously closed at $47.60.

The company reported $1.00 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.84 by $0.16. AutoNation had a net margin of 1.87% and a return on equity of 16.03%. The company had revenue of $5.43 billion during the quarter, compared to analysts’ expectations of $5.58 billion. During the same quarter in the prior year, the company earned $1.05 EPS. AutoNation’s revenue was down 2.4% compared to the same quarter last year.

AutoNation declared that its Board of Directors has approved a stock repurchase program on Tuesday, August 29th that authorizes the company to repurchase $250.00 million in outstanding shares. This repurchase authorization authorizes the company to repurchase up to 6% of its stock through open market purchases. Stock repurchase programs are often an indication that the company’s board believes its stock is undervalued.

A number of equities research analysts have issued reports on AN shares. BidaskClub lowered shares of AutoNation from a “sell” rating to a “strong sell” rating in a report on Saturday, August 5th. Deutsche Bank AG reaffirmed a “hold” rating and issued a $43.00 target price (down from $46.00) on shares of AutoNation in a research report on Wednesday, August 9th. UBS Group AG (USA) downgraded shares of AutoNation from a “positive” rating to a “neutral” rating in a research report on Thursday, September 28th. KeyCorp reissued a “hold” rating on shares of AutoNation in a research report on Friday, September 1st. Finally, Northcoast Research downgraded shares of AutoNation from a “buy” rating to a “neutral” rating in a research report on Wednesday, October 4th. One equities research analyst has rated the stock with a sell rating, nine have assigned a hold rating and three have given a buy rating to the company’s stock. The company has a consensus rating of “Hold” and an average target price of $46.25.

Institutional investors and hedge funds have recently bought and sold shares of the stock. DekaBank Deutsche Girozentrale raised its holdings in shares of AutoNation by 8.4% during the second quarter. DekaBank Deutsche Girozentrale now owns 4,826 shares of the company’s stock worth $215,000 after purchasing an additional 372 shares during the period. Russell Investments Group Ltd. lifted its holdings in AutoNation by 35.4% in the 2nd quarter. Russell Investments Group Ltd. now owns 23,240 shares of the company’s stock valued at $981,000 after acquiring an additional 6,082 shares during the last quarter. Private Management Group Inc. lifted its holdings in AutoNation by 43.9% in the 2nd quarter. Private Management Group Inc. now owns 728,091 shares of the company’s stock valued at $30,696,000 after acquiring an additional 222,267 shares during the last quarter. Schwab Charles Investment Management Inc. lifted its holdings in AutoNation by 6.5% in the 2nd quarter. Schwab Charles Investment Management Inc. now owns 348,313 shares of the company’s stock valued at $14,685,000 after acquiring an additional 21,198 shares during the last quarter. Finally, BlueCrest Capital Management Ltd acquired a new stake in AutoNation in the 2nd quarter valued at about $2,304,000. 74.37% of the stock is currently owned by hedge funds and other institutional investors.

The firm has a market capitalization of $4.99 billion, a P/E ratio of 14.16, a P/E/G ratio of 1.79 and a beta of 1.24. The company has a debt-to-equity ratio of 0.49, a quick ratio of 0.15 and a current ratio of 0.76.

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About AutoNation

AutoNation, Inc (AutoNation) is an automotive retailer in the United States. The Company offers a range of automotive products and services, including new vehicles, used vehicles, parts and service, which includes automotive repair and maintenance services, as well as wholesale parts and collision businesses, and automotive finance and insurance products, including vehicle service and other protection products, as well as the arranging of financing for vehicle purchases through third-party finance sources.

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