The Zacks Auto Retail and Wholesale industry is projected to face a challenging second half of 2026, with full-year sales forecast at 15.8 million units—representing a 2.9% decline from 2025 levels. Factors such as sustained inflation, high vehicle prices averaging $49,220, and new auto loan rates climbing to 9.6% are exerting pressure on consumer purchasing power, particularly affecting mainstream and entry-level buyers. Despite these challenges, new-vehicle demand remains resilient, with sales pace holding near 16.1 million for four consecutive months, according to Cox Automotive.
Key players like Lithia Motors and Sonic Automotive are better positioned to navigate these headwinds, supported by strategic acquisitions and ongoing digitization efforts. Lithia added $2.4 billion in annualized revenues from acquisitions in 2025 and aims for $2-$4 billion in 2026, while Sonic is diversifying operations through its Sonic Powersports unit. The Zacks Auto Retail & Wholesale industry currently ranks #167 out of nearly 245 industries, reflecting a negative earnings outlook and a year-over-year earnings estimate decline of approximately 8%.
In contrast, the industry has underperformed, losing roughly 4% over the past year compared to the S&P 500’s growth of 26%. The industry’s current valuation, based on the trailing 12-month EV/EBITDA ratio, is 9.1X, significantly lower than the S&P 500’s 18.23X, indicating potential value in select stocks as the market reevaluates future performance prospects.
5 Stocks Our Experts Predict Could Double In the Next Year
By submitting your email, you'll also get a free pivot & flow membership. A free daily market overview. You can unsubscribe at any time.
