Sonic Automotive shares up on analyst upgrade

AP News
Posted: Dec 11, 2009 12:09 PM

Shares of auto retailer Sonic Automotive Inc. rose Friday after an analyst upgraded its rating on the stock over improvements in the company's balance sheet.

Sonic Automotive shares rose 22 cents, or 2.3 percent, to $9.74 in midday trading.

In a research note, UBS analyst Colin Langan raised his rating on the stock to "Buy" from "Neutral."

Langan wrote that recent debt and equity issuances have allayed concerns about liquidity at the Charlotte, N.C.-based company. In September, Sonic Automotive issued new equity and a convertible note, using the proceeds to pay down debt.

The analyst also noted that Sonic Automotive has outperformed competitors in measures of vehicle sales and has a balanced portfolio between Detroit automakers, foreign manufacturers and luxury brands.