Bank of America Cuts Lithia Motors (NYSE:LAD) Price Target to $320.00

Key Points

• Bank of America cut its price target on Lithia Motors to $320 from $335, which still implies about a 16.1% upside from the stock's recent price (around $275.59).
• Analyst views are mixed: the consensus rating is a Hold with an average price target of $362.67, while several firms (Barclays, Citi, Wall Street Zen, Zacks) have recently reduced targets or downgraded the stock.
• Lithia recently missed quarterly EPS ($6.74 vs. $8.09 expected), posted a slim net margin of 2.18% and only 0.3% revenue growth year-over-year, indicating near-term earnings pressure.

Lithia Motors (NYSE:LAD - Get Free Report) had its price objective dropped by analysts at Bank of America from $335.00 to $320.00 in a report issued on Monday,MarketScreener reports. Bank of America's price target indicates a potential upside of 16.11% from the stock's current price.

LAD has been the topic of several other research reports. Wall Street Zen cut shares of Lithia Motors from a "hold" rating to a "sell" rating in a research report on Saturday, February 28th. Weiss Ratings reaffirmed a "hold (c+)" rating on shares of Lithia Motors in a research report on Thursday, January 22nd. Barclays reduced their target price on Lithia Motors from $380.00 to $370.00 and set an "overweight" rating on the stock in a report on Tuesday, April 7th. Zacks Research cut Lithia Motors from a "hold" rating to a "strong sell" rating in a research note on Wednesday, March 25th. Finally, Citigroup dropped their price target on Lithia Motors from $366.00 to $326.00 and set a "buy" rating on the stock in a research report on Wednesday, April 8th. Six investment analysts have rated the stock with a Buy rating, five have given a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat.com, the stock presently has a consensus rating of "Hold" and an average price target of $362.67.

Lithia Motors Price Performance

LAD opened at $275.59 on Monday. The company has a debt-to-equity ratio of 1.46, a quick ratio of 0.26 and a current ratio of 1.17. The stock has a market capitalization of $6.44 billion, a PE ratio of 8.64, a price-to-earnings-growth ratio of 0.65 and a beta of 1.22. The stock's 50 day moving average price is $276.91 and its 200-day moving average price is $305.49. Lithia Motors has a 52-week low of $239.78 and a 52-week high of $360.55.

Lithia Motors (NYSE:LAD - Get Free Report) last released its quarterly earnings results on Wednesday, February 11th. The company reported $6.74 earnings per share for the quarter, missing the consensus estimate of $8.09 by ($1.35). Lithia Motors had a net margin of 2.18% and a return on equity of 12.76%. The company had revenue of $9.20 billion during the quarter, compared to the consensus estimate of $9.19 billion. During the same quarter last year, the firm earned $7.79 EPS. The business's revenue was up .3% on a year-over-year basis. On average, equities research analysts predict that Lithia Motors will post 34.45 EPS for the current year.

Institutional Inflows and Outflows

Several hedge funds have recently modified their holdings of LAD. Abrams Capital Management L.P. raised its holdings in shares of Lithia Motors by 1.9% during the third quarter. Abrams Capital Management L.P. now owns 2,490,534 shares of the company's stock valued at $787,009,000 after purchasing an additional 45,856 shares during the last quarter. Dimensional Fund Advisors LP raised its stake in Lithia Motors by 0.5% during the 4th quarter. Dimensional Fund Advisors LP now owns 1,346,783 shares of the company's stock worth $447,583,000 after acquiring an additional 6,113 shares during the period. River Road Asset Management LLC raised 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 purchasing an additional 186,628 shares during the period. Canada Pension Plan Investment Board lifted its position in shares of Lithia Motors by 5.9% in the second quarter. Canada Pension Plan Investment Board now owns 612,377 shares of the company's stock valued at $206,873,000 after acquiring an additional 33,966 shares in the last quarter. Finally, Hotchkis & Wiley Capital Management LLC lifted its holdings in Lithia Motors by 3.6% in the 3rd quarter. Hotchkis & Wiley Capital Management LLC now owns 426,120 shares of the company's stock worth $134,654,000 after purchasing an additional 14,781 shares in the last quarter.

About Lithia Motors

Lithia Motors, Inc is an American automotive retailer headquartered in Medford, Oregon. Founded in 1946 as a small auto body and glass shop, the company has grown through organic expansion and strategic acquisitions to become one of the largest automotive retail networks in North America. Lithia operates dealerships across the United States and Canada, offering a broad portfolio of new and pre-owned vehicles from more than 40 different manufacturers.

The company's core business activities include vehicle sales, financing, insurance, parts and service.

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