AutoNation stock hits all-time high after solid earnings

Cars are exhibited for sale at an AutoNation auto dealership on April 21, 2022 in Valencia, California.

Mario Tama | Getty Pictures

A good fourth-quarter earnings report from AutoNation on Friday propelled the automobile dealer’s inventory to a new all-time significant and its best day in almost 3 several years.

The Florida-primarily based dealership group claimed an adjusted earnings for every share of $6.37 and revenue of $6.7 billion for the past quarter. That compares to analyst anticipations of $5.83 a share and $6.5 billion in revenue, in accordance to Refinitiv.

AutoNation shut Friday at $157.30 a share, marking a new substantial for the car dealer’s stock pursuing an 11.4 % maximize to conclusion the week. It was the stock’s ideal day-to-day overall performance due to the fact April 2020 and a new history-higher closing rate.

The raise follows AutoNation past yr decreasing shares superb by 25% as it repurchased 15.6 million shares, which includes 4.6 million throughout the fourth quarter.

AutoNation CEO Mike Manley attributed the good quarter and file 12 months of earnings to operational execution as very well as new all-time superior earnings in right after product sales and client funding.

“During the 12 months, we expanded our footprint, introduced supplemental transportation solutions, and leveraged our sturdy cash circulation to fund investments and return cash to shareholders,” Manley explained in a release.

AutoNation’s 2022 income flows from functions had been a document $1.7 billion. Its internet earnings previous year was roughly flat from 2021, regardless of a 26% decrease in the fourth quarter to $286.4 million.

Inventory Chart IconStock chart iconhide content

AutoNation’s shares in excess of the previous five years.

Large sellers these as AutoNation have been reporting report outcomes throughout the coronavirus pandemic, as client demand from customers remained resilient but new automobile inventories ended up at history lows because of to manufacturing interruptions due to the world wide overall health crisis as perfectly as provide chain issues.

The situations pushed AutoNation to pivot to market much more utilized cars than new in the course of the pandemic, as individuals who could not pay for or discover a new auto moved to the used auto industry. That propelled selling prices to new file highs and earnings for made use of automobile product sales.

Motor vehicle inventories have been slowly increasing for several vehicle models in modern months. Having said that, there stay hurdles and Wall Road has been checking for a “demand destruction” circumstance in which pent-up demand from customers from the earlier 3 years is depleted.

AutoNation did not release advice for 2023. Manley advised Automotive News he expects the seasonally altered annual charge of gentle-car or truck product sales to be close to 15 million this year, up from 13.7 million in 2022.

“I believe for the foreseeable potential, the retail sector will keep on to evolve which includes how shoppers strategy motor vehicle possession and utilization,” he reported throughout an earnings simply call Friday. “And it really is an remarkable time, frankly to be on the phase and we consider the evolving landscape provides many chances.”