Barrington analyst Gary Prestopino maintained a Buy rating on Kar Auction Services Inc (NYSE: KAR) today and set a price target of $70. The company’s shares closed yesterday at $62.20, close to its 52-week high of $62.56.
Prestopino observed:
“We believe RPU for ADESA should continue to increase in the back half of 2018 and throughout 2019 driven by the shift to commercial vehicles as consigners spend money on vehicles to improve their condition through ancillary services (RPU for Q2/18 was $839 vs. $748 in Q2/17 and $820 in Q1/18). Volume growth for whole car auctions is expected to increase by 2-3% in 2018 to a range of 11.3-11.4 million units increasing to 11.6 million units through 2020. We see ADESA’s TradeRev platform as holding substantial growth potential through offering a digital service for dealer-to-dealer trades within a total North American market opportunity of 5-7 million vehicles annually. TradeRev has been rolled out to 30 markets in North America.”
According to TipRanks.com, Prestopino is a 4-star analyst with an average return of 14.9% and a 65.1% success rate. Prestopino covers the Services sector, focusing on stocks such as Liquidity Services, Ritchie Bros, and AutoWeb Inc.
Kar Auction Services Inc has an analyst consensus of Moderate Buy, with a price target consensus of $66.80, representing a 7.4% upside. In a report issued on August 9, SunTrust Robinson also maintained a Buy rating on the stock with a $70 price target.
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Based on Kar Auction Services Inc’s latest earnings release for the quarter ending June 30, the company reported a quarterly net profit of $93.2 million. In comparison, last year the company had a net profit of $57.2 million.
Based on the recent corporate insider activity of 63 insiders, corporate insider sentiment is negative on the stock.
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KAR Auction Services, Inc. engages in the provision of whole car auction services in North America and salvage auction services in North America and the United Kingdom. It operates through the following segments: ADESA Auctions, Insurance Auto Auctions (IAA), and Automotive Finance Corporation (AFC).
