Stephens has increased its price target for AutoNation Inc. to $232.00 from $228.00 and left its rating at Equal Weight. The revised target sits notably above the stock's most recent trading level of $206.58, though data used by the firm suggests the share price may already be above the company's assessed Fair Value.
The price-target adjustment followed AutoNation's fourth-quarter 2025 earnings release on Friday, February 6. The company reported adjusted earnings per share of $5.08 for the quarter, which exceeded Stephens' forecast of $4.77 and also topped the broader Street consensus of $4.84. For the last twelve months, AutoNation's diluted EPS reached $17.04.
On a year-over-year basis, the company delivered modest adjusted EPS growth of 2.3% despite a 5.8% decline in EBITDA versus the comparable period. AutoNation has also been an active buyer of its own stock, repurchasing 10.3% of outstanding shares over the past twelve months - a significant component of its capital allocation approach. At the same time, the company's gross profit margin is relatively slim at 17.81%.
Stephens noted caution for the near term. The firm highlighted tougher year-over-year comparisons in the first and second quarters of 2026 for AutoNation and the dealer group more broadly. The research team projects a deceleration in combined EBITDA and EPS momentum: from a 5%/15.8% pace in 2025 to an anticipated -1.6%/5.8% profile in 2026. That outlook is consistent with the EPS forecast of $21.38 for fiscal 2026 shown in the underlying data.
Looking further out, Stephens pointed to historical valuation context. Over the past three years, the company's highest price-to-earnings multiple was 11.4x; applying that multiple to a 2027 EPS estimate of $24.19 would imply a share price near $276. By contrast, AutoNation currently trades at a P/E of 12.16, while analyst price targets span a range from $206 to $300. The company carries an approximate market capitalization of $7.27 billion.
The fourth-quarter results contained mixed signals. Adjusted EPS of $5.08 for the quarter surpassed the anticipated $4.91, representing a 3.46% upside versus that expectation. Revenue for the quarter was $6.9 billion, however, which fell short of a $7.22 billion estimate and produced a 4.43% negative surprise. Together these figures paint a picture of uneven performance in the fourth quarter, with earnings strength offset by softer top-line demand relative to expectations.
For investors assessing AutoNation, the recent developments underscore several competing dynamics: an ability to exceed earnings forecasts, pressure on EBITDA and gross margins, and a sizeable share-repurchase program that affects per-share metrics. Stephens' measured upgrade to the target price reflects those mixed factors while leaving the firm's recommendation unchanged.
Context for market participants
- Analyst action: Price target increased to $232 from $228; rating remains Equal Weight.
- Quarterly performance: Q4 adjusted EPS $5.08 versus estimates of $4.77 (Stephens) and $4.84 (Street); revenue $6.9 billion versus $7.22 billion expected.
- Capital allocation and margins: 10.3% of shares repurchased in the past year; gross profit margin at 17.81%.
The balance of EPS beats, revenue misses, shrinking EBITDA and active buybacks contributes to a mixed outlook where valuation, near-term comparisons and margin pressure will likely guide investor assessment in the coming quarters.