Lithia Motors, Inc. $LAD Stock: Iridian Asset Management LLC CT Cuts Holdings

Key Points

• Iridian Asset Management cut its Lithia Motors position by 26.7% in the third quarter, selling 17,066 shares and retaining 46,797 shares valued at approximately $13.7 million.
• Lithia Motors beat quarterly expectations with $10.34 in EPS and $9.95 billion in revenue, while revenue rose 2.8% year over year. The company also increased its quarterly dividend 7.1% to $0.75 per share.
• Analyst sentiment remains moderately bullish, but several firms lowered price targets amid concerns over economic risks, auto-loan delinquencies, vehicle-margin pressure and the company’s elevated debt load.

Iridian Asset Management LLC CT reduced its position in shares of Lithia Motors, Inc. (NYSE:LAD - Free Report) by 26.7% in the 3rd quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The fund owned 46,797 shares of the company's stock after selling 17,066 shares during the period. Lithia Motors makes up about 4.9% of Iridian Asset Management LLC CT's portfolio, making the stock its 7th biggest holding. Iridian Asset Management LLC CT owned approximately 0.21% of Lithia Motors worth $13,657,000 at the end of the most recent reporting period.

Several other institutional investors have also added to or reduced their stakes in LAD. Root Financial Partners LLC bought a new stake in Lithia Motors in the 3rd quarter valued at about $76,000. Crossmark Global Holdings Inc. grew its position in shares of Lithia Motors by 117.9% during the 3rd quarter. Crossmark Global Holdings Inc. now owns 2,162 shares of the company's stock worth $631,000 after purchasing an additional 1,170 shares in the last quarter. Rare Wolf Capital LLC increased its holdings in shares of Lithia Motors by 7.9% during the third quarter. Rare Wolf Capital LLC now owns 7,776 shares of the company's stock worth $2,269,000 after purchasing an additional 572 shares during the period. Abel Hall LLC increased its holdings in shares of Lithia Motors by 6.1% during the third quarter. Abel Hall LLC now owns 777 shares of the company's stock worth $227,000 after purchasing an additional 45 shares during the period. Finally, IFP Advisors Inc raised its position in shares of Lithia Motors by 3.4% in the third quarter. IFP Advisors Inc now owns 2,225 shares of the company's stock valued at $649,000 after buying an additional 74 shares in the last quarter.

Lithia Motors Stock Performance

Shares of Lithia Motors stock opened at $294.55 on Friday. The company has a quick ratio of 0.21, a current ratio of 1.00 and a debt-to-equity ratio of 1.44. Lithia Motors, Inc. has a twelve month low of $239.78 and a twelve month high of $439.49. The stock has a market cap of $6.47 billion, a price-to-earnings ratio of 8.47, a P/E/G ratio of 0.68 and a beta of 1.27. The company's fifty day moving average is $330.21 and its 200 day moving average is $315.25.

Lithia Motors (NYSE:LAD - Get Free Report) last released its earnings results on Wednesday, October 21st. The company reported $10.34 earnings per share for the quarter, beating analysts' consensus estimates of $9.70 by $0.64. Lithia Motors had a net margin of 2.06% and a return on equity of 12.05%. The business had revenue of $9.95 billion during the quarter, compared to the consensus estimate of $9.75 billion. During the same quarter in the prior year, the firm posted $9.50 EPS. The company's revenue for the quarter was up 2.8% compared to the same quarter last year. Sell-side analysts forecast that Lithia Motors, Inc. will post 35.78 EPS for the current year.

Lithia Motors Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Friday, November 20th. Investors of record on Friday, November 6th will be given a dividend of $0.75 per share. This represents a $3.00 annualized dividend and a dividend yield of 1.0%. The ex-dividend date is Friday, November 6th. This is a positive change from Lithia Motors's previous quarterly dividend of $0.70. Lithia Motors's dividend payout ratio is currently 8.06%.

Lithia Motors News Roundup

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

• Positive Sentiment: Lithia Motors reported quarterly earnings of $10.34 per share, exceeding the $9.70 consensus estimate, while revenue of $9.95 billion also surpassed expectations. Revenue increased 2.8% year over year, supporting the initial positive reaction to the results. Lithia Motors Shares Gap Up on Strong Earnings
• Positive Sentiment: Citigroup reduced its price target to $386 from $409 but retained a “buy” rating, implying substantial potential upside from recent trading levels. Citigroup Lithia Motors recommendations
• Positive Sentiment: Barclays lowered its target to $345 from $375 but maintained an “overweight” rating, indicating that the firm still views the valuation as attractive despite more cautious assumptions. Barclays Lithia Motors recommendations
• Positive Sentiment: The company raised its quarterly dividend 7.1% to $0.75 per share, or $3.00 annualized, signaling continued confidence in cash returns to shareholders.
• Neutral Sentiment: The consensus price target was cut approximately 11% to $413.53, suggesting analysts remain bullish overall but are moderating expectations following the earnings release. Lithia Motors consensus price target cut
• Negative Sentiment: Several firms lowered their targets: UBS to $305 and JPMorgan to $315, both with “neutral” ratings. These revisions reflect concern that earnings quality and forward growth may not justify previous valuations. UBS Lithia Motors recommendations
• Negative Sentiment: A recent analysis downgraded LAD to “hold,” citing rising economic risks, elevated auto-loan delinquencies, pressure on new-vehicle profitability, and approximately $15.77 billion in net debt. Rising interest costs were also highlighted as a drag on results. Despite a Strong Showing, a Downgrade Is in Store for Lithia Motors

Insider Buying and Selling

In other Lithia Motors news, Director Stacy Congdon sold 75 shares of the stock in a transaction that occurred on Friday, September 11th. The stock was sold at an average price of $370.73, for a total transaction of $27,804.75. Following the transaction, the director directly owned 2,300 shares in the company, valued at approximately $852,679. This represents a 3.16% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 1.08% of the stock is owned by corporate insiders.

Analyst Upgrades and Downgrades

A number of equities research analysts have issued reports on the stock. Citigroup reduced their price objective on shares of Lithia Motors from $409.00 to $386.00 and set a "buy" rating on the stock in a research note on Friday. JPMorgan Chase & Co. dropped their target price on shares of Lithia Motors from $320.00 to $315.00 and set a "neutral" rating for the company in a research report on Thursday. Wall Street Zen raised shares of Lithia Motors from a "sell" rating to a "hold" rating in a report on Saturday, August 1st. UBS Group reduced their price target on shares of Lithia Motors from $335.00 to $305.00 and set a "neutral" rating on the stock in a research report on Thursday. Finally, Bank of America increased their price target on shares of Lithia Motors from $350.00 to $417.00 and gave the stock a "buy" rating in a research report on Thursday, July 9th. Six analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the stock. Based on data from MarketBeat, the company presently has an average rating of "Moderate Buy" and an average target price of $393.80.

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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