Sonic Auto (SAH) PT Raised to $100 at Needham

Needham analyst Chris Pierce raised the price target on Sonic Auto (NYSE: SAH) to $100.00 (from $74.00) while maintaining a Buy rating.

The analyst comments "We reiterate our Buy rating and raise our target to $100. We continue to be encouraged by execution on the franchise side, updating our standalone SAH multiple vs applying a conservative multiple on conservative estimates (specifically on new vehicle GPU). Echo Park continues to be an underappreciated growth lever, even on a lower unit and earnings trajectory, with since resolved elevated inventory issues holding back 4Q growth and guidance. Our $100 target is driven by a $8.1B enterprise value: $7.7B for SAH's franchise dealerships (10x our FY25E standalone SAH adj EBTIDA, up from 7.5x prior and now inline with peers) and $450M for EchoPark, (now 10x our FY26E adj EBITDA vs 15x prior) vs SAH's current enterprise value of $6B and then applying a 25% SOTP discount given Echo Park's scale within the combined business."

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