Zacks Investment Research Upgrades Lithia Motors (LAD) to Buy

Zacks Investment Research upgraded shares of Lithia Motors (NYSE:LAD) from a hold rating to a buy rating in a research note published on Tuesday. The brokerage currently has $83.00 target price on the stock.

According to Zacks, “Lithia Motors is poised to gain from the expansion of its business through acquisitions and store openings. In the last reported quarter, the company added two stores and divested one franchise. Further, in 2018, it expects to achieve revenues and earnings growth of 11% through store acquisitions. Also, adequate free cash flow enables Lithia Motors to opt for share repurchase programs and pay dividends. However, a continuous rise in SG&A expense primarily due to acquisition expenses and insurance reserves is hampering the company’s profit margin. Over the past three months, shares of Lithia Motors' have underperformed the industry it belongs to.”

Other research analysts have also issued reports about the stock. Buckingham Research cut their price objective on shares of Lithia Motors from $129.00 to $100.00 and set a buy rating on the stock in a report on Thursday, July 26th. ValuEngine lowered shares of Lithia Motors from a hold rating to a sell rating in a report on Friday, June 29th. Guggenheim upgraded shares of Lithia Motors from a neutral rating to a buy rating in a report on Friday, September 21st. Wolfe Research began coverage on shares of Lithia Motors in a report on Tuesday, October 2nd. They set a peer perform rating on the stock. Finally, Craig Hallum cut their price objective on shares of Lithia Motors from $120.00 to $94.00 and set a buy rating on the stock in a report on Thursday, July 26th. One research analyst has rated the stock with a sell rating, two have assigned a hold rating and six have given a buy rating to the company’s stock. The stock presently has a consensus rating of Buy and a consensus price target of $107.00.

Shares of NYSE LAD opened at $75.68 on Tuesday. The stock has a market capitalization of $1.98 billion, a P/E ratio of 9.02, a price-to-earnings-growth ratio of 0.70 and a beta of 1.55. Lithia Motors has a 52 week low of $73.14 and a 52 week high of $127.99. The company has a debt-to-equity ratio of 1.12, a quick ratio of 0.23 and a current ratio of 1.20.

Lithia Motors (NYSE:LAD) last issued its quarterly earnings data on Wednesday, July 25th. The company reported $2.52 EPS for the quarter, missing the Zacks’ consensus estimate of $2.94 by ($0.42). The business had revenue of $3.10 billion during the quarter, compared to analyst estimates of $3.06 billion. Lithia Motors had a net margin of 2.28% and a return on equity of 20.30%. Lithia Motors’s revenue was up 25.5% on a year-over-year basis. During the same period in the previous year, the company posted $2.28 earnings per share. As a group, equities research analysts expect that Lithia Motors will post 9.5 earnings per share for the current year.

In other Lithia Motors news, insider Chris Holzshu purchased 1,250 shares of the business’s stock in a transaction that occurred on Friday, July 27th. The shares were purchased at an average price of $82.23 per share, for a total transaction of $102,787.50. Following the completion of the acquisition, the insider now owns 35,862 shares of the company’s stock, valued at approximately $2,948,932.26. The purchase was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, insider John F. North purchased 1,175 shares of the business’s stock in a transaction that occurred on Monday, July 30th. The stock was acquired at an average price of $84.91 per share, for a total transaction of $99,769.25. Following the acquisition, the insider now directly owns 15,481 shares of the company’s stock, valued at approximately $1,314,491.71. The disclosure for this purchase can be found here. Corporate insiders own 5.95% of the company’s stock.

A number of large investors have recently modified their holdings of the business. BlackRock Inc. grew its position in Lithia Motors by 25.4% in the second quarter. BlackRock Inc. now owns 4,027,924 shares of the company’s stock valued at $380,921,000 after acquiring an additional 815,830 shares in the last quarter. Abrams Capital Management L.P. acquired a new stake in shares of Lithia Motors during the second quarter worth approximately $98,384,000. Dimensional Fund Advisors LP grew its position in shares of Lithia Motors by 4.4% during the second quarter. Dimensional Fund Advisors LP now owns 1,032,044 shares of the company’s stock worth $97,602,000 after buying an additional 43,537 shares in the last quarter. Boston Partners boosted its holdings in Lithia Motors by 1.8% in the second quarter. Boston Partners now owns 772,864 shares of the company’s stock worth $73,090,000 after purchasing an additional 13,594 shares during the period. Finally, Standard Life Aberdeen plc boosted its holdings in Lithia Motors by 8.9% in the second quarter. Standard Life Aberdeen plc now owns 432,098 shares of the company’s stock worth $40,866,000 after purchasing an additional 35,260 shares during the period.

Lithia Motors Company Profile

Lithia Motors, Inc operates automotive franchises, and retails new and used vehicles in the United States. The company operates in three segments: Domestic, Import, and Luxury. It sells new and used cars, replacement parts, vehicle service contracts, vehicle protection products, and credit insurance products; provides vehicle maintenance, warranty, paint, and repair services; and arranges related financing.

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