Barclays sees "opportunities" ahead at these U.S. auto retail firms

Investing.com - AutoNation Inc (NYSE:AN) received an "overweight" rating from Barclays as the investment bank initiated coverage on the U.S. auto retail sector with a "neutral" overall view.

Barclays highlighted AutoNation’s "consistent operating performance, above average growth, shareholder returns" as key factors supporting its positive outlook on the stock. The firm also issued "overweight" ratings on Group 1 Automotive (NYSE:GPI), Lithia Motors (NYSE:LAD), and Penske Automotive Group (NYSE:PAG), while rating Asbury Automotive Group (NYSE:ABG) and Sonic Automotive (NYSE:SAH) as "equal weight."

In the used vehicle retail segment, Barclays expressed a mixed view, assigning an "overweight" rating to Carvana (NYSE:CVNA) and an "underweight" rating to CarMax (NYSE:KMX). The firm noted that while used vehicle demand shows weakness and auto credit data indicates some deterioration at the subprime level, Carvana is "well-positioned to outpace the market" due to its investments in online buying convenience and streamlined logistics.

For digital auction marketplaces, Barclays maintained a constructive growth outlook, expecting these platforms to gain market share from physical auctions. The firm rated KAR Auction Services (NYSE:KAR) as "overweight," citing its stronger position in the dealer-to-dealer channel and established relationships that provide advantages over competitors.

Barclays analysts expect auto dealer earnings to grow in 2026 despite investor concerns about vehicle demand, challenging year-over-year comparisons in Parts & Service, and potential risks from sweeping U.S. tariffs.

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