NEW YORK (TheStreet) -- Asbury Automotive Group (ABG - Get Report) shares are up 3.4% to $59.46 on Thursday.
The increase comes after analyst at BB&T Capital (BBT - Get Report) upgraded the company's share rating to "buy" from "hold".
The upgrade follows a positive first quarter earnings report that showed the company posted record earnings of $1.03 cents per share, beating analysts estimates by 17 cents.
The company posted revenue of $1.4 billion for the quarter, beating analysts estimates of $1.3 billion.
TheStreet Ratings team rates ASBURY AUTOMOTIVE GROUP INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate ASBURY AUTOMOTIVE GROUP INC (ABG) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, solid stock price performance and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 12.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 54.15% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ABG should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- ASBURY AUTOMOTIVE GROUP INC has improved earnings per share by 22.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ASBURY AUTOMOTIVE GROUP INC increased its bottom line by earning $3.25 versus $2.64 in the prior year. This year, the market expects an improvement in earnings ($3.95 versus $3.25).
- The net income growth from the same quarter one year ago has significantly exceeded that of the Specialty Retail industry average, but is less than that of the S&P 500. The net income increased by 18.0% when compared to the same quarter one year prior, going from $22.80 million to $26.90 million.
- You can view the full analysis from the report here: ABG Ratings Report