AutoNation Inc AN

AutoNation reported record quarterly results, with adjusted diluted quarterly EPS of $2.38, up 102% year over year, beating the Refinitiv consensus of $1.65. Same-store revenue growth was about flat as new-vehicle inventory shortages remain an issue, but pricing on both new and used vehicles remains robust, which when combined with large overhead cost cuts and more digital business enabled excellent operating leverage. We are raising our fair value estimate to $71 on a 20-basis-point increase to our midcycle operating margin assumption, stronger 2020 results than previously modeled, higher used-vehicle revenue over time, and the time value of money.