Sonic Automotive (SAH), a major automotive retailer in the U.S., has received a Zacks Rank #5 (Strong Sell) due to weakening earnings trends. Analysts have significantly reduced their earnings forecasts, with the current year’s estimate dropping from $7.05 to $6.54 and next year’s from $7.84 to $7.21. Three analysts revised down their estimates for the current year, while two did so for the next year.
The declining estimates reflect broader challenges in the auto retail sector, including rising interest rates that are increasing loan costs and compressing vehicle demand, particularly for new cars. Additionally, the normalization of used car prices is squeezing margins for dealers. The Automotive – Retail and Whole Sales industry currently ranks in the Bottom 7% of Zacks Industry Rank.
