Asbury Automotive Group (NYSE:ABG) Announces Earnings Results, Misses Expectations By $0.26 EPS

Asbury Automotive Group (NYSE:ABG) posted its quarterly earnings data on Tuesday. The company reported $6.16 EPS for the quarter, missing the consensus estimate of $6.42 by ($0.26), FiscalAI reports. Asbury Automotive Group had a return on equity of 12.72% and a net margin of 2.83%. The firm had revenue of $4.41 billion for the quarter, compared to analysts’ expectations of $4.51 billion. During the same period in the previous year, the firm earned $7.17 earnings per share. The firm’s quarterly revenue was down 8.1% compared to the same quarter last year.

Here are the key takeaways from Asbury Automotive Group’s conference call:

• Tekion rollout is complete across all active stores, with early adopters showing gains in customer-pay gross profit, fixed-operations productivity, units per salesperson, and technician profitability. Management expects further benefits as recently converted stores build proficiency, targeting SG&A at low-60% of gross profit by the end of 2027.
• The used-vehicle business continued to improve, with used retail gross profit up 3% year over year, gross profit per unit up 10% to $1,777, and retail volume up 4.5% sequentially. Management plans to pursue additional volume while protecting profitability and expects year-over-year unit growth in the fourth quarter.
• Third-quarter adjusted EPS was $6.16, including a $0.69-per-share non-cash headwind from Total Care Auto (TCA); EPS would have been $6.85 excluding the deferral. TCA’s pre-tax income fell to $5 million from $14 million a year earlier, and management expects continued TCA-related F&I pressure in 2027.
• Parts and service performance remained below expectations, with same-store customer-pay gross profit flat and total fixed-operations gross profit down 2%. New-vehicle units declined 8% year over year, while new-vehicle gross profit per unit fell 6% sequentially amid pressure from certain import and Stellantis brands.
• The FTC administrative proceeding against Asbury was dismissed, reinforcing management’s view that its F&I practices are lawful and compliant. The company also reiterated plans to reduce transaction-adjusted net leverage from 3.5 times to below 3 times by mid-2027 before prioritizing share repurchases and tuck-in acquisitions.

Asbury Automotive Group Trading Up 2.4%

ABG traded up $4.67 during trading on Thursday, hitting $198.21. 97,659 shares of the stock were exchanged, compared to its average volume of 255,263. The company has a debt-to-equity ratio of 0.77, a quick ratio of 0.29 and a current ratio of 0.91. The firm has a 50 day simple moving average of $189.61 and a 200 day simple moving average of $204.96. The firm has a market cap of $3.56 billion, a price-to-earnings ratio of 7.45, a P/E/G ratio of 0.97 and a beta of 0.78. Asbury Automotive Group has a 1 year low of $160.30 and a 1 year high of $258.74.

Wall Street Analyst Weigh In

Several equities analysts recently commented on the stock. Citigroup upped their price target on shares of Asbury Automotive Group from $212.00 to $250.00 and gave the company a “neutral” rating in a report on Friday, July 31st. UBS Group upped their target price on Asbury Automotive Group from $193.00 to $204.00 and gave the company a “neutral” rating in a research note on Wednesday. JPMorgan Chase & Co. reduced their price target on Asbury Automotive Group from $190.00 to $185.00 and set an “underweight” rating on the stock in a report on Tuesday, October 6th. Morgan Stanley decreased their price target on Asbury Automotive Group from $230.00 to $184.00 and set an “equal weight” rating for the company in a research note on Monday, October 5th. Finally, Barclays cut their price objective on Asbury Automotive Group from $230.00 to $220.00 and set an “equal weight” rating on the stock in a research report on Thursday. Three investment analysts have rated the stock with a Buy rating, five have given a Hold rating and two have issued a Sell rating to the stock. Based on data from MarketBeat.com, Asbury Automotive Group currently has a consensus rating of “Hold” and a consensus price target of $220.88.

Asbury Automotive Group Company Profile

Asbury Automotive Group, Inc is a U.S.-based automotive retailer that operates franchised and independent dealerships. Its dealerships sell new and used vehicles from a range of domestic, import and luxury automobile brands, and provide related services throughout the vehicle ownership cycle.

The company’s operations include automotive repair and maintenance, parts and accessories, collision repair, vehicle financing and insurance products, and other dealership services. Asbury also supports vehicle sales and service through digital retailing and online customer tools.

Founded in 1995, Asbury has expanded through acquisitions and serves customers across multiple markets in the United States.