Risk-reward remains attractive for U.S. franchise auto dealerships- JPM

Asbury Automotive

11/07/2023 14:43

** J.P. Morgan says low unemployment and pent-up demand
accumulated through pandemic is driving resiliency in car sales 
    ** But used and new car prices remain above pre-pandemic
levels making affordability challenging amid high interest rates
and stubborn inflation
    ** AutoNation Inc  AN.N  (PT raised to $150 from $135;
Underweight): Despite share price having a strong 12 months,
recent capital deployments will have little addition in
near-term, says brokerage
    ** Asbury Automotive Group Inc  ABG.N  (PT raised to $240
from $210; Neutral): Brokerage says that other than the co's
positives, they would now need to see ongoing execution towards
its LT (Luxury Touring) targets, particularly on same-store unit
growth to revisit rating and PT
    ** Penske Automotive Group Inc  PAG.N  (PT raised to $150
from $135; Neutral): "Within Automotive, PAG has best-in-class
mix on all fronts, including brand mix in new vehicles, used to
new vehicle ratio, and high degree of high-margin customer pay
mix within parts & services"- JPM

 (Reporting by Ananta Agarwal in Bengaluru)
 ((Ananta.Agarwal@thomsonreuters.com))