ABG Should I Buy
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Asbury Automotive Group Inc (ABG) is not a strong buy at the moment for a beginner investor with a long-term focus. The technical indicators are bearish, and the company's recent financial performance shows a significant decline in net income and EPS despite slight revenue growth. Additionally, hedge funds are selling, and there is no recent congress trading data or strong proprietary trading signals to suggest an immediate buy. While the company is optimizing its portfolio through dealership sales, this is not enough to outweigh the negative catalysts.
The technical indicators are bearish. The MACD is below 0 and negatively contracting, the RSI is neutral at 33.23, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading near a key support level at 216.857, with resistance at 226.251.
The company is optimizing its portfolio by selling underperforming dealerships, generating $210 million in net proceeds. The used vehicle market shows good momentum, according to analysts.
Hedge funds are selling heavily, with a 165.95% increase in selling activity over the last quarter. The company's net income and EPS have dropped significantly YoY. Analysts have lowered price targets multiple times, citing soft auto sales and industry pressures. Rising tariff costs could further impact the automotive sector.
In Q4 2025, revenue increased by 3.82% YoY to $4.6765 billion, but net income dropped by 53.42% YoY to $60 million. EPS also fell by 53.21% YoY to 3.06. Gross margin improved slightly to 16.47%, up 1.54% YoY.
Analysts have maintained an Equal Weight rating on the stock, with price targets recently lowered to $230 from $250 and $251. Analysts cite soft auto sales and industry pressures as reasons for caution, though they note some positive momentum in the used vehicle market.
