In a report released Wednesday, Bank of America analyst John Murphy downgraded Sonic Automotive SAH from Buy to Underperform and lowered its price target from $39 to $27.
Analysts at Bank of America downgrade Sonic due to the company's execution issues. Murphy said Sonic is underperforming in comparison to its peers within the automotive retail sector and the company's SG&A expense has been rising faster than its gross profit.
Bank of America's $27 price target for Sonic is based on the change of Bank of America's 2015 EPS estimate from 15X to 12.5x.
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