The Zacks Auto Retail and Wholesale industry faces challenges from slowing vehicle sales, high borrowing costs, and affordability constraints. However, industry fundamentals are improving with consolidation, cost structures, and digital adoption. AutoNation, Inc. (AN) and Asbury Automotive Group (ABG) are strategically positioned for growth through acquisitions and digitization initiatives.

Factors impacting the industry include slowing U.S. vehicle sales due to affordability challenges, high interest rates, and elevated vehicle prices. The EV market is adjusting to the loss of federal tax incentives, leading to uncertain sales and production growth. Auto retailers are expanding through strategic acquisitions and enhancing customer experience with digital platforms.

The Zacks Auto Retail & Wholesale industry ranks #89, in the top 36% of Zacks industries. While the industry has underperformed the S&P 500 and sector, it is currently trading at an EV/EBITDA ratio of 8.36X. AutoNation and Asbury Automotive Group are two stocks to watch, with growth strategies, digital initiatives, and positive sales outlooks.

AutoNation is positioning for growth through acquisitions and digital capabilities, with a Zacks Rank #2 and Value Score of A. Asbury Automotive Group benefits from a diversified revenue stream and digitization efforts, with a Zacks Rank #2 and Value Score of A. Both companies show promising sales growth for 2026, making them strong contenders for investment opportunities.

Read more at Nasdaq: 2 Auto Retailers Poised to Outperform in a Shifting 2026 Landscape