AutoNation Maintains Strong Operating Performance - Analyst Blog


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On Jul 3, 2014, we issued an updated research report on AutoNation Inc. ( AN ). This Zacks Rank #1 (Strong Buy) stock is performing well in all business segments.

AutoNation recorded a 10.3% rise in earnings per share from the year-ago quarter to 75 cents per share in first-quarter 2014, in line with the Zacks Consensus Estimate.  The year-over-year improvement in earnings was driven by gross profit in all business sectors. Revenues increased 6.5% to $4.36 billion but missed the Zacks Consensus Estimate of $4.39 billion.

AutoNation is undertaking rapid store expansion to boost sales. On Apr 1, 2014, the company opened an Audi store in South Orlando. Additionally, in Jun 2014, it announced an agreement to purchase Roundtree Chrysler Dodge Jeep Ram in Mobile, AL.

Moreover, AutoNation follows an aggressive share repurchase policy. In 2012 and 2013, the company repurchased 16.6 million shares and 1.1 million shares, respectively. Further, AutoNation bought back 2.4 million shares for an aggregate price of $115.7 million in the first quarter of 2014.

However, rising interest rates pose a threat to the companyas a significant amount of its debt carries variable rate. The Zacks Consensus Estimate for AutoNation's 2014 earnings is currently $3.41 per share, which translates into a year-over-year growth rate of 14.58%.

Key Picks from the Sector

Other stocks worth considering in the same industry include Asbury Automotive Group, Inc. ( ABG ), Group 1 Automotive Inc. ( GPI ) and Lithia Motors Inc. ( LAD ). All these stocks carry a Zacks Rank #1.

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AUTONATION INC (AN): Free Stock Analysis Report

LITHIA MOTORS (LAD): Free Stock Analysis Report

GROUP 1 AUTO (GPI): Free Stock Analysis Report

ASBURY AUTO GRP (ABG): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
More Headlines for: AN , LAD , GPI , ABG

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