Lithia Motors, Inc. (NYSE:LAD) Given Consensus Recommendation of "Moderate Buy" by Brokerages

Key Points

• Lithia Motors has a consensus analyst rating of “Moderate Buy”, with 7 buy ratings and 5 hold ratings among 12 covering firms. The average 1-year price target is about $368.11.
• The company recently beat quarterly earnings expectations, reporting EPS of $7.34 versus the $7.06 estimate and revenue of $9.27 billion, slightly above forecasts. Analysts expect full-year EPS of 34.37.
• Lithia authorized a $500 million share repurchase program and also raised its quarterly dividend to $0.57 per share from $0.55. The buyback covers up to 7.9% of shares and may signal management believes the stock is undervalued.

Shares of Lithia Motors, Inc. (NYSE:LAD - Get Free Report) have been assigned a consensus rating of "Moderate Buy" from the twelve research firms that are covering the company, MarketBeat.com reports. Five equities research analysts have rated the stock with a hold recommendation and seven have issued a buy recommendation on the company. The average 1-year target price among brokers that have covered the stock in the last year is $368.1111.

LAD has been the subject of several research reports. Zacks Research raised shares of Lithia Motors from a "strong sell" rating to a "hold" rating in a research note on Thursday, April 23rd. Weiss Ratings cut shares of Lithia Motors from a "hold (c)" rating to a "hold (c-)" rating in a research note on Monday, May 4th. Barclays decreased their price target on shares of Lithia Motors from $380.00 to $370.00 and set an "overweight" rating for the company in a research note on Tuesday, April 7th. Wells Fargo & Company raised their price target on shares of Lithia Motors from $293.00 to $305.00 and gave the stock an "equal weight" rating in a research note on Thursday, April 30th. Finally, UBS Group began coverage on shares of Lithia Motors in a research note on Wednesday, May 27th. They issued a "buy" rating and a $348.00 target price for the company.

Insider Buying and Selling at Lithia Motors

In related news, Director Shauna Mcintyre sold 245 shares of the firm's stock in a transaction on Monday, May 11th. The shares were sold at an average price of $294.64, for a total value of $72,186.80. Following the completion of the transaction, the director directly owned 1,846 shares of the company's stock, valued at approximately $543,905.44. This trade represents a 11.72% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, Director Richard J. Bailey, Jr. sold 297 shares of the firm's stock in a transaction on Tuesday, May 26th. The shares were sold at an average price of $280.57, for a total transaction of $83,329.29. Following the completion of the transaction, the director directly owned 760 shares of the company's stock, valued at $213,233.20. This represents a 28.10% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold 617 shares of company stock valued at $174,966 over the last three months. 1.08% of the stock is owned by company insiders.

Hedge Funds Weigh In On Lithia Motors

Hedge funds and other institutional investors have recently made changes to their positions in the company. Northwestern Mutual Wealth Management Co. boosted its position in Lithia Motors by 1,062.8% during the fourth quarter. Northwestern Mutual Wealth Management Co. now owns 11,070 shares of the company's stock worth $3,679,000 after purchasing an additional 10,118 shares during the period. Abrams Capital Management L.P. boosted its position in 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 worth $787,009,000 after purchasing an additional 45,856 shares during the period. Life Cycle Investment Partners Ltd bought a new position in Lithia Motors during the fourth quarter worth $58,409,000. Tabor Asset Management LP bought a new position in Lithia Motors during the third quarter worth $1,722,000. Finally, Natixis Advisors LLC boosted its position in Lithia Motors by 12.9% during the third quarter. Natixis Advisors LLC now owns 142,276 shares of the company's stock worth $44,959,000 after purchasing an additional 16,226 shares during the period.

Lithia Motors Price Performance

Shares of LAD opened at $304.28 on Wednesday. The stock has a market capitalization of $6.94 billion, a P/E ratio of 10.68, a P/E/G ratio of 0.64 and a beta of 1.26. Lithia Motors has a twelve month low of $239.78 and a twelve month high of $360.55. The company has a 50 day moving average of $277.39 and a 200-day moving average of $298.56. The company has a quick ratio of 0.24, a current ratio of 0.99 and a debt-to-equity ratio of 1.41.

Lithia Motors (NYSE:LAD - Get Free Report) last issued its quarterly earnings results on Wednesday, April 29th. The company reported $7.34 earnings per share for the quarter, topping the consensus estimate of $7.06 by $0.28. The company had revenue of $9.27 billion during the quarter, compared to analysts' expectations of $9.22 billion. Lithia Motors had a net margin of 1.88% and a return on equity of 12.49%. The business's quarterly revenue was up 1.0% on a year-over-year basis. During the same period last year, the business earned $7.66 EPS. As a group, equities research analysts forecast that Lithia Motors will post 34.37 EPS for the current fiscal year.

Lithia Motors declared that its board has authorized a stock repurchase plan on Tuesday, May 26th that permits the company to repurchase $500.00 million in shares. This repurchase authorization permits the company to repurchase up to 7.9% of its shares through open market purchases. Shares repurchase plans are usually a sign that the company's management believes its shares are undervalued.

Lithia Motors Increases Dividend

The company also recently announced a quarterly dividend, which was paid on Friday, May 22nd. Investors of record on Friday, May 8th were paid a $0.57 dividend. This is a boost from Lithia Motors's previous quarterly dividend of $0.55. This represents a $2.28 annualized dividend and a dividend yield of 0.7%. The ex-dividend date of this dividend was Friday, May 8th. Lithia Motors's dividend payout ratio (DPR) is 8.01%.

Lithia Motors Company Profile

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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