AutoNation (AN.N): Positive Sustainable Trends

研报英文原文证据摘录

AutoNation (AN.N): Positive Sustainable Trends

Viewpoint |

03 Aug 2026 21:11:07 ET │ 22 pages

AutoNation (AN.N)

Positive Sustainable Trends

CITI'S TAKE

Improving US demand trends, elevated variable gross margins, cost

performance, consolidation, and cash generation should result in a

higher level of earnings than in the past. AN has invested in Buy

expanding its brand, buying back stock and more recently, growing a Price (03 Aug 26 16:00) US$215.43

captive finance subsidiary. AN has applied surplus cash to share

repurchase, reducing share count 60% since the beginning of 2021 Target price US$290.00↑

and we believe elevated financials should allow the pace to continue. from US$287.00

We rate AN Buy with a $290 price target. Expected share price return 34.6%

Expected dividend yield 0.0%A higher level of performance — Variable gross profit selling new and used retail

units totaled $4,777 per unit in 2Q down from $4,879 last year, about flat from the Expected total return 34.6%

beginning of 2024 and $1,300 per unit higher than the 2015-19 average. We believe Market Cap US$7,122M

variable gross per unit will remain at elevated levels, supporting a higher level of

earnings than in the past. In addition, combined gross profit from Aftersales and CFS

is expected to exceed 78% of total company gross profit in 2026, providing a higher

margin and more consistent profit stream than selling new and used vehicles.

Price Performance

Estimates increased — We increased our 2026 estimate to $21.70 up from $21.00, (RIC: AN.N, BB: AN US)

reflecting the 2Q beat, a lower share count and an increased contribution from

AutoNation Finance. We increased our 2027 estimate to $25.80 up from $22.80

and expect 2028 earnings of $28.10 up from $24.25: our increased assumptions