Lithia Motors (NYSE:LAD) Stock Price Target Cut by Morgan Stanley

Key Points

• Morgan Stanley cut Lithia Motors’ price target to $310 from $358 while maintaining an “equal weight” rating, implying only 0.82% upside from the prior close.
• Analyst sentiment remains broadly positive, with a consensus “Moderate Buy” rating and an average price target of $419.10; targets range from $340 at JPMorgan to $490 at Jefferies.
• Lithia’s latest quarter exceeded expectations, reporting $10.03 in EPS versus an $8.73 estimate and $9.79 billion in revenue, up 2.2% year over year.

Lithia Motors (NYSE:LAD - Get Free Report) had its target price reduced by Morgan Stanley from $358.00 to $310.00 in a research note issued to investors on Monday, Benzinga reports. The brokerage presently has an "equal weight" rating on the stock. Morgan Stanley's target price would indicate a potential upside of 0.82% from the company's previous close.

Other equities research analysts have also recently issued reports about the stock. JPMorgan Chase & Co. upped their target price on shares of Lithia Motors from $325.00 to $340.00 and gave the company a "neutral" rating in a report on Tuesday, August 4th. Wells Fargo & Company lifted their price target on Lithia Motors from $306.00 to $395.00 and gave the stock an "equal weight" rating in a report on Thursday, July 30th. Jefferies Financial Group reissued a "buy" rating and set a $490.00 price target on shares of Lithia Motors in a research report on Thursday, July 30th. Benchmark raised their price objective on Lithia Motors from $400.00 to $475.00 and gave the company a "buy" rating in a research report on Thursday, July 30th. Finally, UBS Group downgraded Lithia Motors from a "buy" rating to a "neutral" rating and lifted their target price for the stock from $370.00 to $440.00 in a research note on Thursday, July 30th. Seven research analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the stock. According to MarketBeat, Lithia Motors currently has a consensus rating of "Moderate Buy" and an average price target of $419.10.

Lithia Motors Price Performance

NYSE:LAD opened at $307.48 on Monday. The stock has a market capitalization of $6.76 billion, a PE ratio of 10.20, a P/E/G ratio of 0.65 and a beta of 1.27. Lithia Motors has a 1-year low of $239.78 and a 1-year high of $439.49. The firm has a fifty day simple moving average of $356.73 and a 200 day simple moving average of $311.50. The company has a current ratio of 1.00, a quick ratio of 0.21 and a debt-to-equity ratio of 1.46.

Lithia Motors (NYSE:LAD - Get Free Report) last posted its quarterly earnings results on Wednesday, July 29th. The company reported $10.03 earnings per share (EPS) for the quarter, topping the consensus estimate of $8.73 by $1.30. Lithia Motors had a net margin of 1.88% and a return on equity of 12.16%. The firm had revenue of $9.79 billion for the quarter, compared to analyst estimates of $9.64 billion. During the same period in the prior year, the firm posted $10.24 earnings per share. The company's quarterly revenue was up 2.2% compared to the same quarter last year. On average, research analysts expect that Lithia Motors will post 36 EPS for the current fiscal year.

Insiders Place Their Bets

In related news, Director Stacy Congdon sold 75 shares of the stock in a transaction that occurred on Friday, September 11th. The shares were sold at an average price of $370.73, for a total value of $27,804.75. Following the completion of the transaction, the director owned 2,300 shares of the company's stock, valued at $852,679. This represents a 3.16% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 1.08% of the stock is owned by company insiders.

Institutional Inflows and Outflows

A number of large investors have recently added to or reduced their stakes in the business. BlackRock Inc. acquired a new position in Lithia Motors in the second quarter valued at $696,482,000. Dimensional Fund Advisors LP grew its position in Lithia Motors by 3.2% during the first quarter. Dimensional Fund Advisors LP now owns 1,389,870 shares of the company's stock valued at $347,074,000 after buying an additional 43,087 shares during the period. River Road Asset Management LLC grew its position in shares of Lithia Motors by 33.6% during the 4th quarter. River Road Asset Management LLC now owns 742,677 shares of the company's stock valued at $246,814,000 after acquiring an additional 186,628 shares during the period. Bank of New York Mellon Corp increased its position in Lithia Motors by 10.5% in the fourth quarter. Bank of New York Mellon Corp now owns 229,048 shares of the company's stock worth $76,119,000 after buying an additional 21,806 shares during the last quarter. Finally, Madison Asset Management LLC purchased a new stake in Lithia Motors in the 2nd quarter worth about $66,988,000.

Lithia Motors Company Profile

Lithia Motors, Inc, doing business as Lithia & Driveway NYSE: LAD, is an automotive retailer that operates a network of franchised dealerships and other vehicle-sales businesses. The company sells new and used vehicles from a broad range of automobile manufacturers, including domestic, import and luxury brands.

In addition to vehicle sales, Lithia & Driveway provides automotive financing and insurance products, maintenance and repair services, replacement parts, collision services and other related offerings.

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