UPDATE: Goldman Sachs Group Reiterates Neutral Rating, Raises PT on KAR Auction Services
In a report published Friday, Goldman Sachs Group reiterated its Neutral rating on KAR Auction Services (NYSE: KAR), and raised its price target from $18.00 to $20.50.
Goldman Sachs noted, “We are adjusting our forecasts to reflect recent results and guidance. We continue to expect sales trends in the core whole car auction business to recover in 2013 and beyond as the supply of vehicles builds, based on historical auto sales trends. We are also hiking our price target to reflect the roll-forward of estimates on our risk/reward framework, higher multiples based on the closer proximity of the anticipated turn in the whole car business, greater liquidity associated with the recently announced secondary offering, and our favorable view of shareholder friendly capital allocation, as the company just announced its first dividend ($0.76 per annum, for a 4.1% yield, one of the highest in our universe). In a release this morning, the firm reiterated recent earnings guidance.”
KAR Auction Services closed on Thursday at $18.60.
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