ABG Should I Buy
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Asbury Automotive Group Inc (ABG) is not a strong buy for a beginner investor with a long-term strategy at this time. The technical indicators suggest a bearish trend, and the financial performance shows significant declines in net income and EPS despite slight revenue growth. While analysts have mixed ratings, with some positive sentiment for the industry, the lack of strong positive catalysts and the bearish technical outlook make it prudent to hold off on buying right now.
The technical indicators for ABG are bearish. The MACD histogram is negative and expanding downward, the RSI is neutral at 21.795, and the moving averages show a bearish alignment (SMA_200 > SMA_20 > SMA_5). The stock is trading near its support level of 205.951, with resistance levels at 216.181 and 226.411.
BofA recently reinstated a Buy rating with a $255 price target, citing optimism for the automotive industry in 2026 due to regulatory adjustments favoring internal combustion engines. Gross margin increased slightly YoY, indicating some operational efficiency improvements.
Hedge funds are selling, with a 165.95% increase in selling activity over the last quarter. The company sold three dealerships recently, which may indicate portfolio restructuring but could also signal challenges in maintaining profitability. Financial performance in Q4 2025 showed a significant drop in net income (-53.42%) and EPS (-53.21%), raising concerns about profitability.
In Q4 2025, revenue increased by 3.82% YoY to $4.68 billion, but net income dropped by 53.42% to $60 million, and EPS fell by 53.21% to $3.06. Gross margin improved slightly to 16.47%, up 1.54% YoY.
Analyst ratings are mixed. BofA has a Buy rating with a $255 price target, while Barclays and Morgan Stanley maintain Equal Weight ratings with price targets of $230. Analysts are cautious about the automotive sector due to soft auto sales but note momentum in the used vehicle market.
