Asbury Automotive (ABG) Upgraded to Buy: Here's What You Should Know

Core Viewpoint - Asbury Automotive Group (ABG) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Ratings - The Zacks rating system is primarily based on a company's changing earnings picture, tracking the Zacks Consensus Estimate for EPS from sell-side analysts [2]. - The Zacks rating upgrade for Asbury Automotive reflects an optimistic earnings outlook, likely leading to increased buying pressure and a rise in stock price [4][6]. Impact of Earnings Estimate Revisions - Changes in a company's future earnings potential, as shown by earnings estimate revisions, are strongly correlated with near-term stock price movements, particularly due to institutional investors' reliance on these estimates for fair value calculations [5]. - Rising earnings estimates and the subsequent rating upgrade for Asbury Automotive suggest an improvement in the company's underlying business, which should encourage investors to drive the stock price higher [6]. Zacks Rank System - The Zacks Rank stock-rating system categorizes stocks into five groups based on four earnings estimate-related factors, with a strong historical performance, particularly for Zacks Rank 1 stocks which have averaged a +25% annual return since 1988 [8]. - The upgrade of Asbury Automotive to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [11]. Earnings Estimate Revisions for Asbury Automotive - For the fiscal year ending December 2025, Asbury Automotive is expected to earn $27.39 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 2.2% over the past three months [9].