Lithia Motors (NYSE:LAD) Stock Price Target Lowered at Citigroup

Key Points

• Citigroup lowered Lithia Motors’ price target from $409 to $386 while maintaining a “buy” rating, implying about 30.9% upside from the prior close.
• Analyst sentiment remains broadly positive but mixed: six analysts rate the stock “buy” and six rate it “hold,” producing a consensus “moderate buy” rating and an average target of $393.80.
• Lithia exceeded quarterly expectations, reporting $10.34 in earnings per share and $9.95 billion in revenue, though several firms cut their targets amid concerns about leverage, rising interest costs and pressure on vehicle profitability.

Lithia Motors (NYSE:LAD - Get Free Report) had its price objective cut by equities research analysts at Citigroup from $409.00 to $386.00 in a research report issued to clients and investors on Friday, Benzinga reports. The firm currently has a "buy" rating on the stock. Citigroup's target price would suggest a potential upside of 30.87% from the company's previous close.

Several other equities analysts have also recently commented on LAD. JPMorgan Chase & Co. reduced their target price on Lithia Motors from $320.00 to $315.00 and set a "neutral" rating for the company in a research report on Thursday. Barclays lowered their price target on Lithia Motors from $375.00 to $345.00 and set an "overweight" rating on the stock in a report on Friday. Wells Fargo & Company boosted their price objective on Lithia Motors from $306.00 to $395.00 and gave the stock an "equal weight" rating in a report on Thursday, July 30th. Wall Street Zen upgraded shares of Lithia Motors from a "sell" rating to a "hold" rating in a research report on Saturday, August 1st. Finally, Morgan Stanley decreased their price objective on shares of Lithia Motors from $358.00 to $310.00 and set an "equal weight" rating on the stock in a research report on Monday, October 5th. Six analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the company. According to data from MarketBeat, the company currently has an average rating of "Moderate Buy" and a consensus target price of $393.80.

Lithia Motors Price Performance

Shares of LAD traded up $3.87 during mid-day trading on Friday, reaching $294.94. 265,561 shares of the stock traded hands, compared to its average volume of 317,109. The firm has a fifty day moving average price of $331.86 and a 200 day moving average price of $315.40. The company has a market cap of $6.48 billion, a price-to-earnings ratio of 9.77, a price-to-earnings-growth ratio of 0.62 and a beta of 1.27. The company has a current ratio of 1.00, a quick ratio of 0.21 and a debt-to-equity ratio of 1.44. Lithia Motors has a 1 year low of $239.78 and a 1 year high of $439.49.

Lithia Motors (NYSE:LAD - Get Free Report) last released its quarterly earnings results on Wednesday, October 21st. The company reported $10.34 earnings per share for the quarter, topping the consensus estimate of $9.70 by $0.64. Lithia Motors had a net margin of 2.06% and a return on equity of 12.05%. The firm had revenue of $9.95 billion for the quarter, compared to analysts' expectations of $9.75 billion. During the same quarter in the prior year, the firm posted $9.50 earnings per share. The business's quarterly revenue was up 2.8% on a year-over-year basis. As a group, equities research analysts predict that Lithia Motors will post 35.60 earnings per share for the current year.

Insiders Place Their Bets

In other Lithia Motors news, Director Stacy Congdon sold 75 shares of the firm's stock in a transaction dated Friday, September 11th. The stock was sold at an average price of $370.73, for a total transaction of $27,804.75. Following the sale, the director owned 2,300 shares in the company, valued at $852,679. This trade represents a 3.16% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 1.08% of the stock is owned by insiders.

Hedge Funds Weigh In On Lithia Motors

Institutional investors have recently modified their holdings of the company. Hsbc Holdings PLC lifted its holdings in shares of Lithia Motors by 193.4% in the 2nd quarter. Hsbc Holdings PLC now owns 60,113 shares of the company's stock worth $17,219,000 after acquiring an additional 39,624 shares during the last quarter. Redwood Investment Management LLC bought a new position in shares of Lithia Motors during the 2nd quarter valued at $1,190,000. Bank of America Corp DE bought a new position in shares of Lithia Motors during the 2nd quarter valued at $21,371,000. Leonteq Securities AG raised its position in Lithia Motors by 570.8% in the 1st quarter. Leonteq Securities AG now owns 7,386 shares of the company's stock worth $1,844,000 after purchasing an additional 6,285 shares during the period. Finally, Deutsche Bank AG purchased a new position in Lithia Motors in the 2nd quarter worth $901,000.

Key Lithia Motors News

Here are the key news stories impacting Lithia Motors this week:

• Positive Sentiment: Strong quarterly results: Lithia reported third-quarter earnings of $10.34 per share, above the $9.70 consensus estimate, while revenue reached $9.95 billion versus expectations of $9.75 billion. Revenue increased 2.8% year over year, helping support the initial positive reaction in LAD shares. Lithia Motors Shares Gap Up on Strong Earnings
• Positive Sentiment: Finance and used-vehicle performance improved: Driveway Finance Corporation’s income rose nearly 70% to $32 million, and used-vehicle gross profit per unit increased 13% year over year. These gains provide support for earnings even as other parts of the dealership business face pressure. Lithia: 3 Key Takeaways for Long-Term Investors
• Neutral Sentiment: Dividend increased: Lithia declared a quarterly dividend of $0.75 per share, up 7.1% from $0.70, for an annualized payout of $3.00 and a yield of approximately 1.1%. The dividend adds shareholder support but is unlikely to offset broader concerns about the company’s financial risks.
• Negative Sentiment: Multiple price-target reductions: UBS cut its target from $335 to $305 and maintained a neutral rating, while JPMorgan lowered its target from $320 to $315 and also remained neutral. Barclays reduced its target from $375 to $345 but retained an overweight rating. The cuts suggest analysts see less upside despite LAD’s earnings beat.
• Negative Sentiment: Rising interest costs and leverage are weighing on sentiment: Coverage highlighted net debt of approximately $15.77 billion, rising interest costs and elevated auto-loan delinquencies. Revenue growth has been supported by acquisitions, but profitability per vehicle—particularly in new vehicles—is under pressure. A downgrade from buy to hold reflects concerns that economic risks may outweigh LAD’s low cash-flow valuation multiples. Despite a Strong Showing, a Downgrade Is in Store for Lithia Motors

Lithia Motors Company Profile

Lithia Motors, Inc is an automotive retailer headquartered in Medford, Oregon. Operating under the Lithia & Driveway name, the company sells new and used vehicles through a network of franchised dealerships and digital retail channels. Its dealerships represent a broad range of domestic, Asian and European automotive brands.

In addition to vehicle sales, Lithia provides related services including vehicle financing and insurance products, parts and maintenance, collision repair, and other after-sales support.

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