Sonic Auto (SAH) PT Lowered to $93 at Needham

Needham analyst Chris Pierce lowered the price target on Sonic Auto (NYSE: SAH) to $93.00 (from $100.00) while maintaining a Buy rating.

The analyst commented: "We reiterate our Buy rating but lower our target to $93 given recent readings in our Echo Park inventory tracker. We saw similar trends in the data in October, with SAH printing a weaker than expected 4Q24 for their Echo Park segment, driving us to lower our 1Q25 used retail estimates at both SAH's franchise and Echo Park stores. We still see a positive r/r skew in used auto, and have seen recent improvements in wholesale data, but a choppy recovery is now more fully baked into our expectations. Our $93 target is driven by a $7.8B enterprise value: $7.7B for SAH's franchise dealerships (10x our FY25E standalone SAH adj EBITDA) and $154M for EchoPark, (now just 5x our FY25E adj EBITDA vs 10x FY26 prior) and a 25% SOTP discount given Echo Park's sizing within SAH."

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