DULUTH, Ga. - Asbury (NYSE:ABG) Automotive Group, Inc. (NYSE: ABG), a prominent automotive retail and service company in the U.S., today announced an increase in its share repurchase program, now authorizing a total of $400 million for stock buybacks. The move underscores the company's commitment to a disciplined capital allocation strategy and confidence in its long-term business outlook.
The expanded authorization represents an additional $246 million on top of the existing program, which had $144 million remaining for share repurchases. So far in 2024, Asbury has bought back approximately 281,000 shares, totaling about $59 million.
David Hult, Asbury's President and CEO, stated that the increase reflects the company's confidence in its strategic execution and business prospects. He emphasized that Asbury's robust cash flow and solid balance sheet position the company to optimize shareholder returns over time.
The repurchase plan allows Asbury to buy shares on the open market, through private transactions, or other methods compliant with federal securities laws. The timing and volume of repurchases will depend on various factors, including stock price, market conditions, and capital structure considerations. The program does not obligate the company to acquire any specific number of shares and may be adjusted, paused, or discontinued without notice.
Asbury operates 157 new vehicle dealerships with 206 franchises across 31 brands, along with 37 collision repair centers and a provider of vehicle protection products, Total Care Auto, Powered by Landcar. The company's comprehensive offerings span new and used vehicle sales, parts and service, and finance and insurance products. Recognized for its workplace culture, Asbury ranks 18th in Forbes' 2023 list of America's Best Mid-Sized Companies and has received accolades from Newsweek and U.S. News & World Report.
InvestingPro Insights
Asbury Automotive Group's (NYSE: ABG) recent increase in its share repurchase program is a move that aligns with the company's aggressive stance on buying back its shares, which is reflected in one of the InvestingPro Tips highlighting management's commitment to this capital return strategy. This activity is supported by the company's solid financials, with a market capitalization of $4.84 billion and a healthy price-to-earnings (P/E) ratio of 7.44, indicating that the company could be undervalued relative to its earnings.
The company's revenue growth also remains robust, showcasing a quarterly increase of 17.28% in Q1 2024, pointing towards a positive business trajectory. Despite concerns over weak gross profit margins, which stand at 18.22%, Asbury's overall performance has been strong, with significant returns over the last week, month, and even the last decade, as noted in the InvestingPro Tips. These returns include a 9.61% total price return over the last week, and an impressive 20.26% over the last year.
Investors considering Asbury's stock may also take note of the company's profitability outlook. Analysts predict Asbury will remain profitable this year, as evidenced by the last twelve months' performance, although five analysts have revised their earnings downwards for the upcoming period. Interested readers can find a total of 10 InvestingPro Tips for Asbury on InvestingPro, which provide deeper insights into the company's financial health and stock performance. Moreover, for those looking to gain full access to these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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