New and used car sales are recovering rapidly along with parts and service volumes, and AutoNation Inc. has maintained strong margins in the last couple of quarters despite end-market volatility. Therefore, we are revising our outlook on AutoNation to stable from negative and affirming our 'BBB-' issuer credit rating. The stable outlook incorporates our expectation the company will maintain its debt-to-EBITDA ratio below 3x and free operating cash flow (FOCF)-to-debt ratio above 15% in the next 12 months. The stable outlook incorporates our expectation the company will maintain its debt-to-EBITDA ratio below 3x and FOCF-to-debt ratio above 15% in the next 12 months. We could lower the rating on AutoNation if its leverage stays above 3x for an extended period
