Sonic Automotive Earnings: Profit Normalization for Dealers Continues and Will Keep Going in 2024

Sonic Automotive finished 2023 with fourth-quarter adjusted diluted EPS down 37.5% year over year to $1.63, missing the $1.87 LSEG consensus. We don’t see anything in the results to merit a fair value change, but we'll reassess all modeling inputs when we roll the model forward for the 10-K filing. U.S. auto dealers are fighting used-vehicle supply scarcity, poor used-vehicle affordability, and a very tough new vehicle comparable, all due to the chip shortage, so the large EPS decline is not shocking.