ABG Should I Buy
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Asbury Automotive Group Inc (ABG) is not a strong buy for a beginner, long-term investor at this moment. Despite some positive technical indicators and a modest price increase, the company's recent financial performance, hedge fund selling trends, and lack of strong positive catalysts suggest caution. Holding the stock or waiting for better entry points may be more prudent.
The MACD histogram is positive and expanding, indicating bullish momentum. RSI is neutral at 62.389, showing no overbought or oversold conditions. However, moving averages are bearish (SMA_200 > SMA_20 > SMA_5), signaling a potential downtrend. The stock is trading near a resistance level (R1: 198.04), which could limit further short-term upside.
The stock price has shown a 2.30% increase in the last trading session. Gross margin improved by 1.54% YoY in Q4 2025, indicating operational efficiency.
Hedge funds are selling, with a 165.95% increase in selling activity over the last quarter. 13D Management completely divested its position in Q4 2025, reflecting potential concerns about market prospects. Net income and EPS dropped significantly by -53.42% and -53.21% YoY, respectively. Analysts have expressed concerns about the second half of 2026 and 2027 due to potential oil price spikes.
In Q4 2025, revenue grew by 3.82% YoY to $4.68 billion, but net income dropped by -53.42% YoY to $60 million. EPS also declined by -53.21% YoY to $3.06. Gross margin improved slightly to 16.47%, up 1.54% YoY.
Analysts have mixed views. JPMorgan maintains an Underweight rating with a price target of $240, citing concerns about oil price impacts. BofA reinstated coverage with a Buy rating and a $255 price target, optimistic about the industry's regulatory environment. Barclays lowered its price target to $230 and maintains an Equal Weight rating, citing soft auto sales pressures.
