On May 24, Stephens reaffirmed its Equal Weight rating and set a $175 price target for AutoNation, Inc. (NYSE:AN). The automobile retailer recently wrapped up its first asset-backed securitization, which Stephens analysts claim is an essential milestone for AutoNation Finance Trust, the company’s financial arm.
With $1.08 billion funded by non-recourse warehouse debt, AutoNation, Inc. announced that it raked in $1.45 billion in auto loans via AutoNation Finance at the end of the first quarter of 2025, representing a 74.4% advance rate. This new securitization deal is projected to release about $164 million in capital for the company.
The asset-backed securities notes carry a weighted-average interest rate of 4.9%, which is slightly lower than the 5.4% interest rate on the non-recourse warehouse line of credit that had been previously in use. With that in mind, Stephens estimates that the new approach could lead to an additional $123 million of capital for the company this year, assuming a 98% advance rate.
One of America’s largest car retailers, AutoNation, Inc. sells both new and used cars through a network of franchises.
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