AutoNation Stock Slides as Softer Q3 Outlook Raises Margin Concerns

AutoNation, Inc. (NYSE:AN) CFO Thomas Szlosek offered a softer third-quarter outlook at Morgan Stanley’s 14th Annual Laguna Conference. The automotive retailer’s stock price subsequently declined. According to Szlosek: Service and financial products generate about 80% of AutoNation’s profit (weakness in those segments matters most for earnings). Parts-and-service growth should be more modest in Q3 as customers become more selective on maintenance spending and warranty comparisons remain difficult. Service contributes roughly half of AutoNation’s profit. New-vehicle gross profit per unit will likely fall about 10% sequentially in Q3, citing model-year changeovers, affordability pressure and greater pricing concessions. EV demand is weak, with penetration falling to the low single digits from about 8%-9% previously after federal incentives expired. Customer Financial Services is seeing some near-term softness, with management expecting a roughly $50 – $100 sequential decline in unit profitability following weaker July and August attachment rates. One offset is AutoNation Finance. The portfolio is approaching $3 billion, and penetration has reached about 18% of financed vehicles. Read Also: Revenue Miss, EV Sales Slump Send AutoNation Stock Lower AN Technical Setup: Oversold But Trend Remains BearishAN remains technically weak, trading 15.6% below its 20-day SMA, 17.5% below its 50-day SMA, and 16.2% below its 200-day SMA.RSI at 22.45 signals deeply oversold conditions, suggesting the selloff is stretched and could trigger a short-term rebound. However, the 20-day SMA remains below the 50-day, keeping the near-term trend bearish.The stock has also fallen below its prior 52-week low of $172.58, which could now act as resistance. A stronger rebound faces additional resistance near $198.AutoNation Earnings Preview and Analyst Price Target OutlookLooking further out, the next major catalyst for the stock arrives with the October 22, 2026 (estimated) earnings report. EPS Estimate: $5.72 (Up from $5.01 YoY) Revenue Estimate: $7.11 Billion (Up from $7.04 Billion YoY) Valuation: P/E of 8.1x (Indicates a value opportunity relative to peers) Analyst Consensus & Recent Actions: The stock has a Buy rating and an average price target of $243.25. Recent analyst moves include: Argus Research: Buy (Raises Target to $246.00) (Aug. 11) Stephens & Co.: Equal-Weight (Raises Target to $232.00) (Aug. 10) Morgan Stanley: Overweight (Raises Target to $250.00) (Aug. 7) AN Stock Today: AutoNation Slides in Friday TradingAN Stock Price Activity: AutoNation shares were down 3.69% to $168.43 at the time of publication on Friday, according to Benzinga Pro data. Read Also: Nasdaq 100 Rallies as Oil Slides, Yields Retreat: Stock Market Today Photo: Piotr Swat via Shutterstock