Deutsche Bank Securities Reiterates its HOLD Rating on Asbury Automotive, Target Price Reduced

October 29 00:00 2011

NEW YORK, October 29 ( – Analysts at Deutsche Bank Securities have reiterated their HOLD rating on the shares Asbury Automotive (NYSE: ABG). The target price has been reduced from $19.50 to $18.50.

In a research note published on October 27, analysts at Deutsche Bank Securities mention that the company has reported its Q3 EPS in line with the estimates and consensus. Although ABG posted weak new vehicle volumes, margins were strong and gross profit grew 8.5% yoy, the analysts say. F&I per unit was positive and looks sustainable whereas Selling, General & administrative costs were poor due to DMS conversion costs, the analysts add. The analysts believe that ABG can improve its fixed costs substantially from centralized management &  IT. As these changes are still some quarters away, the analysts maintains the HOLD rating on valuation.