AutoNation, Inc. Just Recorded A 8.2% EPS Beat: Here's What Analysts Are Forecasting Next

It's been a good week for AutoNation, Inc. (NYSE:AN) shareholders, because the company has just released its latest quarterly results, and the shares gained 7.0% to US$165. The result was positive overall - although revenues of US$6.5b were in line with what the analysts predicted, AutoNation surprised by delivering a statutory profit of US$4.49 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for AutoNation

Following last week's earnings report, AutoNation's ten analysts are forecasting 2024 revenues to be US$27.2b, approximately in line with the last 12 months. Statutory earnings per share are expected to descend 19% to US$18.47 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$27.2b and earnings per share (EPS) of US$18.52 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$175. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic AutoNation analyst has a price target of US$215 per share, while the most pessimistic values it at US$140. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that AutoNation's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.7% growth on an annualised basis. This is compared to a historical growth rate of 6.9% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.9% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than AutoNation.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for AutoNation going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - AutoNation has 3 warning signs (and 1 which shouldn't be ignored) we think you should know about.

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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.