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AutoNation (AN) to Announce Q1 Earnings: Key Predictions

AutoNation, Inc. AN is slated to release first-quarter 2021 results on Apr 20, before the opening bell. The Zacks Consensus Estimate for the quarter’s earnings and revenues is pegged at $1.80 per share and $5.08 billion, respectively.

AutoNation, the largest automotive retailer in the United States, delivered better-than-expected results in the last reported quarter on stellar revenues from new and used vehicles.

In the preceding four quarters, the company surpassed the Zacks Consensus Estimate on all occasions, with the average being 97.3%. This is depicted in the graph below:

AutoNation, Inc. Price and EPS Surprise

AutoNation, Inc. price-eps-surprise | AutoNation, Inc. Quote

Trend in Estimate Revisions

The Zacks Consensus Estimate for AutoNation’s first-quarter earnings per share has been unchanged in the past 30 days. The bottom-line projection indicates an improvement from the year-ago earnings of 91 cents per share. Moreover, the Zacks Consensus Estimate for quarterly revenues suggests a year-over-year rise of more than 8%.

Factors at Play

Demand for vehicles in first-quarter 2021 had been strong amid preference for personal mobility, widespread vaccination drive, optimism around federal aid and the gradual reopening of activities. Additionally, AutoNation’s heightened focus on providing enhanced digital solutions in response to the evolving buying behavior of consumers is anticipated to have fueled sales during the quarter in discussion. The consensus mark for revenues of new and used vehicles is pegged at $2,538 million and $1,452 million, indicating an increase from the year-ago level of $2,282 million and $1,249 million, respectively.

Additionally, the consensus mark for revenues from Finance & Insurance is pegged at $267 million, suggesting a rise from $236 million reported in the comparable year-ago period. On a somewhat discouraging note, the revenue estimate for Parts & Services is pegged at $836 million, implying a decline from $876 million registered in first-quarter 2020.

Meanwhile, increased focus on cost discipline is likely to have aided margins in the to-be-reported quarter. The Zacks Consensus Estimate for operating income is pegged at 17.7% as a percentage of revenues, pointing to growth from the year-ago level of 17.4%. The potential increase is most likely to have been driven by higher income from new vehicle sales. The consensus mark for operating income as a percentage of new vehicles is pegged at 6.22%, signaling an uptick from 4.2% recorded in the corresponding quarter of 2020.

Earnings Whispers

Our proven Zacks model does not conclusively predict an earnings beat for AutoNation this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here as elaborated below.

Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: AutoNation currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combinations

Here are a few auto stocks worth considering, as these have the right combination of elements to come up with an earnings beat this time around:

Tesla TSLA has an Earnings ESP of +12.06% and carries a Zacks Rank #3 at present. The electric vehicle behemoth is slated to announce first-quarter 2021 results on Apr 26.

Ford F has an Earnings ESP of +2.11% and carries a Zacks Rank #3 at present. The company is set to announce first-quarter 2021 results on Apr 28.

Oshkosh Corporation OSK has an Earnings ESP of +0.73% and carries a Zacks Rank #2 at present. The company is scheduled to announce second-quarter fiscal 2021 results on Apr 28.

Zacks Top 10 Stocks for 2021

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Ford Motor Company (F): Free Stock Analysis Report
 
AutoNation, Inc. (AN): Get Free Report
 
Tesla, Inc. (TSLA): Get Free Report
 
Oshkosh Corporation (OSK): Get Free Report
 
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