Morgan Stanley Raises AutoNation Price Target to $220, Maintains Overweight Rating

Morgan Stanley raised its price target on AutoNation (AN) to $220 from $195 and kept an Overweight rating on the shares. The firm notes stability in auto and consumer data, and dealers are poised to deliver on earnings in the second half. AutoNation is one of the firm's "best-in-class operators" and is part of the firm's Overweight-rated dealer group.

Morgan Stanley analyst Adam Jonas has maintained an "Overweight" rating on AutoNation (AN) while raising the price target from $195.00 to $220.00 USD [1]. This significant increase of 12.82% reflects a positive outlook for the automotive retailer. The move comes amidst stability in auto and consumer data, with analysts noting that dealers are poised to deliver on earnings in the second half of the year.

AutoNation, the second-largest automotive dealer in the United States, reported a revenue of approximately $27 billion in 2024. The company operates over 240 dealerships, 52 collision centers, and a variety of other related businesses, including used-vehicle stores, a captive lender, auction sites, and parts distributors. New-vehicle sales account for nearly half of its revenue, with used vehicles, parts, and repair services also contributing significantly.

The recent upward revision in price target by Morgan Stanley aligns with broader analyst consensus. Based on the one-year price targets from 10 analysts, the average target price for AutoNation Inc (AN) is $224.22, with a high estimate of $255.00 and a low estimate of $200.00 [1]. The average target implies an upside of 7.15% from the current price of $209.27. Furthermore, the consensus recommendation from 14 brokerage firms is a 2.1 rating, indicating an "Outperform" status [1].

AutoNation's Relative Strength Rating also improved, rising from 69 to 73 on Monday, according to IBD's proprietary rating system [2]. This rating tracks price performance over the last 52 weeks and compares it to all other stocks, with a score ranging from 1 (worst) to 99 (best). The increase in the Relative Strength Rating suggests a positive trend in AutoNation's stock performance.

GuruFocus estimates that the fair value (GF Value) for AutoNation Inc (AN) in one year is $197.99, suggesting a downside of 5.39% from the current price of $209.27 [1]. This estimate is based on historical multiples and future performance expectations.

References:
[1] https://www.gurufocus.com/news/3062546/morgan-stanley-raises-price-target-for-autonation-an-to-220-an-stock-news
[2] https://www.investors.com/ibd-data-stories/autonation-getting-closer-to-key-technical-measure-3/