High dealership earnings drive buy/sell market to boomerang back in Q2, with first half of 2020 surpassing 2019, according to The Blue Sky Report® by Kerrigan Advisors; very active buy/sell market predicted for second half of 2020.
Kerrigan Advisors’ latest Blue Sky Report finds the pace of U.S. dealership buy/sell activity quickened in the third quarter and could accelerate further in Q4.
The results of Kerrigan Advisors’ first annual dealer survey show Subaru and Toyota franchisees lead the industry in believing their dealerships will increase in value, outpacing all other brands — including highlines.
Kerrigan Advisors’ latest Blue Sky buy/sell report counts 49 transactions in the second quarter, a slight decline from Q1 but enough to maintain a 200-plus-transaction pace for 2019.
Kerrigan Advisors analysts say the stock prices for America’s seven publicly traded dealership groups are outpacing the broader U.S. equity markets and could soar higher on lower interest rates and new trucks.
Despite headwinds threatening dealership profitability, Kerrigan Advisors’ first-quarter report indicates 2019 is trending toward another 200-plus transaction year for the auto retail buy/sell market.
New tax law and economies of scale help publics and consolidators buck trends to grow earnings and fuel the buy/sell market to 92% growth in the second quarter. According to the firm, the market is on track for a fifth consecutive year of more than 200 acquisitions.
Despite slowing auto sales and a slight dip in blue sky values, dealership buy/sell activity remained robust in the first quarter, according to the buy/sell advisory firm’s The Blue Sky Report.
Kerrigan Advisors today announced that The Kerrigan Auto Retail Index was up 11.66% in November, significantly outperforming the broader S&P 500 Index by 240.9%. The firm attributed the rise in its index to the election of Donald Trump to the presidency.
Buy/Sell activity remains strong, but the firm believes activity could slow in the fourth quarter as sellers hope for a more favorable tax rebate on their sales proceeds in 2017.