Stephens Reaffirms Equal Weight on AutoNation, Highlights $1.45B Auto Loan Securitization
On May 24, Stephens reaffirmed its Equal Weight rating and set a $175 price target for AutoNation, Inc. (NYSE:AN). The automobile retailer recently wrapped up its first asset-backed securitization, which Stephens analysts claim is an essential milestone for AutoNation Finance Trust, the company's financial arm.
With $1.08 billion funded by non-recourse warehouse debt, AutoNation, Inc. (NYSE:AN) announced that it raked in $1.45 billion in auto loans via AutoNation Finance at the end of the first quarter of 2025, representing a 74.4% advance rate. This new securitization deal is projected to release about $164 million in capital for the company.
The asset-backed securities notes carry a weighted-average interest rate of 4.9%, which is slightly lower than the 5.4% interest rate on the non-recourse warehouse line of credit that had been previously in use. With that in mind, Stephens estimates that the new approach could lead to an additional $123 million of capital for the company this year, assuming a 98% advance rate.
One of America's largest car retailers, AutoNation, Inc. (NYSE:AN) sells both new and used cars through a network of franchises.
While we acknowledge the potential of AN to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AN and that has 100x upside potential, check out our report about the cheapest AI stock.
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