Inventory prices for public dealership teams took Worthwhile Wednesday after Morgan Stanley equity analyst Adam Jonas launched a evaluation notice expressing warning.
In his report, Jonas downgraded Penske Automotive Group Inc. and Sonic Automotive Inc. “as A mirrored picture of secular enterprise headwinds regardless of peak earnings.”
On Wednesday, share prices fell by 10.4 % for Penske, 8.6 % for Sonic, 11.5 % for Group 1 Automotive Inc., 9.7 % for AutoNation Inc., 9 % for Lithia Motors Inc. And eight.5 % for Asbury Automotive Group Inc., Based mostly on MarketWatch. Share prices for these corporations enhanced barely on Thursday.
Jonas expressed considerations Regarding the strain franchised dealerships face as Tesla Inc. and completely different electrical car makers increase And sure enhance The quantity of direct-to-shopper car gross sales. EV startup Rivian Is additionally planning direct gross sales, and Vietnamese startup VinFast recently said it plans 60 direct-to-shopper EV dealerships in California.
The Morgan Stanley report positioned The lack of legacy automakers To regulate The client expertise in a direct-gross sales mannequin as Definitely one of many largest threats dealing with automakers — “even greater than The specter of electrification itself.”
He acknowledged that It is a “extremely complicated problem” involving regulatory, authorized and even social elements That would take years to play out.