Shares of auto retail ecosystem companies have outperformed year-to-date, despite the announcement of auto tariffs and industry fundamentals weakening "even before the impact of tariffs have flowed through to vehicle pricing," according to JPMorgan.

Analyst Rajat Gupta changed ratings on these four stocks.

Cars.com

JPMorgan upgraded the rating for Cars.com Inc CARS from Neutral to Overweight, while establishing a price target of $14.

Shares of companies in the business-to-consumer)marketplaces have underperformed franchise dealers so far this year, Gupta said. Although B2C marketplaces are not immune to broader industry pressures, they are better positioned than business-to-business marketplaces, he added.

Cars.com has taken "significant strides in developing new products and solutions that integrate them into dealers' operational workflows, including market intelligence, consumer sourcing functionalities, D2D wholesale, and online retailing, which bodes well for the retention of dealer customers, even amid a volatile industry backdrop," he further wrote.

Sonic Automotive

The analyst downgraded Sonic Automotive Inc SAH from Overweight to Underweight, while raising the price target from $65 to $72.

While Sonic Automotive boasts a "strong luxury brand mix and exposure to California and Texas," the company has underperformed its peers, the analyst stated. Its stock currently trades at a premium to peers, "despite macro and industry headwinds and elevated balance sheet leverage," he added.  

Check out other analyst stock ratings.

Group 1 Automotive

JPMorgan downgraded Group 1 Automotive Inc GPI from Overweight to Neutral, while reducing the price target from $435 to $415.

The company's execution has been solid for several years, "with favorable Texas exposure serving as a relative tailwind," Gupta said. He added, however, that concentration in one state makes for increased volatility, "as regional economic conditions could significantly impact growth."

Asbury Automotive Group

Gupta downgraded Asbury Automotive Group Inc ABG from Neutral to Underweight, while cutting the price target from $235 to $225.

"While Asbury's strategic acquisitions, expansion into captive warranty, and digital investments like Clicklane position it for long-term growth, JPMorgan sees the risk-reward as unfavorable due to integration and execution risks, elevated leverage, and underperformance in used vehicle gross profit since 2019," the analyst wrote.

CARS, SAH, GPI, ABG Price Action: At the time of publication on Thursday,

• Shares of Cars.com had risen by 4.54% to $12.89.
• Sonic Automotive's stock had declined by 8.79% to $77.68.
• Group 1 Automotive's share price had declined by 7.36% to $411.80.
• Shares of Asbury Automotive had declined by 5.72% to $233.98.

Read More:
• Inventory Stabilizes, But Cars.com Lags Peers: Analyst Flags Profit Pressures

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