AutoNation (AN) Valuation Check After Expanding Its Maryland Footprint With Jerry’s Toyota Acquisition

AutoNation (AN) just planted a bigger flag in Maryland, closing its purchase of Jerry's Toyota in Baltimore and rebranding it as AutoNation Toyota White Marsh. This adds meaningful revenue and volume to an already dense regional footprint.

See our latest analysis for AutoNation.

Investors seem to be rewarding AutoNation for disciplined expansion, with the share price at $209.12 and a strong year to date share price return of 25.27 percent. This complements an impressive five year total shareholder return of 207.3 percent and suggests momentum remains broadly constructive despite some recent volatility.

If AutoNation's latest move has you thinking about the broader sector, it could be a good time to explore auto manufacturers for other dealership and auto retail opportunities worth watching.

Yet with shares trading below analyst targets and a sizable implied intrinsic discount, the real debate is whether AutoNation still offers upside from here or whether markets are already pricing in the next leg of growth.

Most Popular Narrative: 12.6% Undervalued

With AutoNation last closing at $209.12 against a narrative fair value near $239, the gap suggests room for upside if the core thesis plays out.

Industry consolidation and AutoNation's disciplined capital allocation (including M&A in targeted markets and share repurchases) create scale benefits and cost efficiencies, providing further margin expansion opportunities and positioning AutoNation to leverage secular trends favoring large, diversified retailers in negotiating power, cost structure, and sustained earnings growth.

Read the complete narrative.

Want to see what kind of revenue runway, margin lift, and earnings power this strategy is banking on? The narrative leans on surprisingly ambitious compounding. Curious which specific assumptions unlock that higher fair value and whether they look conservative or bold on a multi year view? Dive in to find out how every moving part adds up to that target.

Result: Fair Value of $239.18 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, faster-than-expected EV adoption or accelerating direct-to-consumer models could erode AutoNation's high-margin service profits and pressure long-term growth.

Find out about the key risks to this AutoNation narrative.

Build Your Own AutoNation Narrative

If you see the story differently or want to pressure test the assumptions yourself, you can build a complete narrative in minutes using Do it your way.

A great starting point for your AutoNation research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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