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AutoNation (NYSE:AN) shares surged more than 9% Friday on the back of its latest earnings release, which saw it beat earnings and revenue consensus expectations.
The automotive retailer reported earnings of $6.37 per share, $0.55 better than the analyst estimate of $5.82, while revenue for the quarter came in at $6.7 billion versus the consensus estimate of $6.53B.
Revenue was a fourth quarter record, driven by higher average selling prices of vehicles, increased new vehicle unit sales, and continued growth in after-sales, more than offsetting the company’s lower used vehicle unit sales.
“Our fourth quarter results capped off another record year for earnings and revenue as our Associates drove results while providing a superior Customer experience. We closed the year strong with record full-year results for After-Sales and Customer Financial Services. We continue to perform well in the current environment while taking significant steps to address the industry transformation,” said Mike Manley, AutoNation’s Chief Executive Officer.
Following the report, Morgan Stanley analysts maintained an Underweight rating and $96 price target on AutoNation shares.
“AN posted 4Q results that reiterated the dealer narrative we’ve seen this earnings season: resiliency in the new market, with ASPs continuing to trend upwards, and continued buybacks supporting share prices,” said the analysts. “With used car values firming up again, expectations for continued over-earning have been elongated into 1Q or even 2Q of this year.”
