By Connor Hart
Shares of AutoNation fell, adding the car-dealership chain to a growing list of auto stocks feeling the pressure of President Trump's plan to impose 25% tariffs on all vehicles imported to the U.S.
The stock was 5.3% lower Thursday at $161.61. Shares have slipped 1.9% in the past year.
AutoNation's expansion strategy should result in better long-term profitability, J.P. Morgan analysts said in a research note. Currently, though, the growth investments are keeping the company's selling, general and administrative expenses elevated, adding uncertainty to an already volatile market, they add.
This uncertainty regarding the company's profitability comes as auto tariffs, which are slated to go into effect on April 3, threaten to further pressure car and truck prices that have been rising for years.
It is possible that AutoNation's growth investments take longer than expected to subside and deliver returns, which could in turn hurt future financing, as well as the execution of any potential mergers and acquisitions, according to the analysts.
J.P. Morgan maintains its neutral rating on the stock and lowers its price target to $175 from $195.
Write to Connor Hart at connor.hart@wsj.com
(END) Dow Jones Newswires
March 27, 2025 14:35 ET (18:35 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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