Bank of America Reiterates Buy on Sonic Automotive on 10K Delay, Revolver Amendment
In a report published Monday, Bank of America analyst John Murphy reiterated a Buy rating and $30.00 price target on Sonic Automotive (NYSE: SAH).
In the report, Murphy noted, “This morning Sonic Automotive delivered 3 pieces of news that we believe are not as negative as initially perceived by the market. 1) The company has delayed the filing of its 2012 10K, citing lack of effective control over its dealership-level accounting processes; 2) Sonic has amended its revolver and floorplan facilities; 3) the amendment removes the pledge of certain assets as collateral, which reduces Sonic's borrowing base, but allows for share repurchases. Therefore, although the market appears to be considering these combined announcements as entirely negative, we view them individually as one negative, one relatively neutral, and one positive piece of news.”
Sonic Automotive closed on Friday at $24.35.
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