Sonic Automotive, Inc. : Attractive price levels

06/23/2021 | 03:11am EDT

Tommy Douziech

long trade Stop-loss triggered

Entry price : 44.56$ | Target : 59.7$ | Stop-loss : 36.28$ | Potential : 33.98%

Sonic Automotive, Inc. shares reflect an interesting technical chart pattern from a medium term view In fact, the support at 43.77 USD represents an important technical support area based on weekly price data that could limit downward movements by the stock. Investors have an opportunity to buy the stock and target the $ 59.7.

Summary

• The company has strong fundamentals. More than 70% of listed companies have a lower mix of growth, profitability, debt and visibility criteria.
• In a short-term perspective, the company has interesting fundamentals.

Strengths

• The equity is one of the most attractive in the market with regard to earnings multiple-based valuation.
• The company is one of the most undervalued, with an "enterprise value to sales" ratio at 0.19 for the 2021 fiscal year.
• Over the last twelve months, the sales forecast has been frequently revised upwards.
• Over the last 4 months, analysts have significantly revised upwards the company's estimated sales.
• For the last twelve months, analysts have been gradually revising upwards their EPS forecast for the upcoming fiscal year.
• For several months, analysts have been revising their EPS estimates roughly upwards.
• Analysts covering this company mostly recommend stock overweighting or purchase.
• The difference between current prices and the average target price is rather important and implies a significant appreciation potential for the stock.

Weaknesses

• The company has insufficient levels of profitability.
• The firm pays small or no dividend to shareholders. For that reason, it is not a yield company.

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