In a report released today, John Murphy from Bank of America Securities maintained a Hold rating on Kar Auction Services (KAR – Research Report), with a price target of $22.00.
John Murphy has given his Hold rating due to a combination of factors surrounding Kar Auction Services’ recent performance and future outlook. The company posted a solid fourth-quarter result, with adjusted EBITDA surpassing both internal estimates and consensus forecasts. This was largely due to strong execution in the Marketplace and Finance segments, where dealer consignment volumes showed promising growth.
However, despite these positive results, John remains cautious about the company’s outlook for 2025. The projected growth in adjusted EBITDA is below expectations, and there are concerns about the supply of late-model used and off-lease vehicles, which may remain below trend in the coming year. While the company is in the midst of a management-led turnaround with a focus on digital business expansion, significant recovery in volumes is anticipated in 2026. Hence, the Hold rating reflects a cautious stance until clearer signs of improvement emerge.