Lithia Motors, Inc. (NYSE:LAD) Receives Consensus Rating of "Moderate Buy" from Brokerages

Key Points

• Wall Street sentiment is upbeat: Lithia Motors has a consensus rating of “Moderate Buy” from 12 analysts, with seven buy ratings and five hold ratings. The average 1-year price target is about $368.11.
• Recent earnings topped expectations: The company reported quarterly EPS of $7.34, beating estimates of $7.06, and revenue came in at $9.27 billion, slightly above forecasts. Revenue also rose 1.0% year over year.
• Capital return and insider activity stood out: Lithia boosted its quarterly dividend to $0.57 per share and authorized a $500 million stock buyback program. At the same time, two directors recently sold shares, and insiders have sold 782 shares over the past three months.

Lithia Motors, Inc. (NYSE:LAD - Get Free Report) has received an average rating of "Moderate Buy" from the twelve research firms that are currently covering the company, MarketBeat.com reports. Five analysts have rated the stock with a hold rating and seven have given a buy rating to the company. The average 1-year target price among brokers that have updated their coverage on the stock in the last year is $368.1111.

A number of research analysts have recently commented on the stock. Wells Fargo & Company lifted their price objective on shares of Lithia Motors from $293.00 to $305.00 and gave the company an "equal weight" rating in a research report on Thursday, April 30th. JPMorgan Chase & Co. upped their target price on shares of Lithia Motors from $320.00 to $325.00 and gave the company a "neutral" rating in a report on Thursday, May 7th. 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. Bank of America reduced their price target on Lithia Motors from $335.00 to $320.00 in a report on Monday, April 13th. Finally, Weiss Ratings downgraded Lithia Motors from a "hold (c)" rating to a "hold (c-)" rating in a research report on Monday, May 4th.

Insider Buying and Selling

In related news, Director Shauna Mcintyre sold 245 shares of the stock in a transaction on Monday, May 11th. The stock was sold at an average price of $294.64, for a total value of $72,186.80. Following the sale, the director owned 1,846 shares in the company, valued at approximately $543,905.44. This represents a 11.72% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible 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 value of $83,329.29. Following the sale, the director directly owned 760 shares of the company's stock, valued at $213,233.20. This represents a 28.10% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold a total of 782 shares of company stock worth $229,572 over the last three months. 1.08% of the stock is owned by insiders.

Hedge Funds Weigh In On Lithia Motors

Large investors have recently modified their holdings of the stock. Northwestern Mutual Wealth Management Co. increased its position in Lithia Motors by 1,062.8% during the 4th quarter. Northwestern Mutual Wealth Management Co. now owns 11,070 shares of the company's stock worth $3,679,000 after buying an additional 10,118 shares during the period. Life Cycle Investment Partners Ltd acquired a new stake in shares of Lithia Motors during the fourth quarter worth $58,409,000. Tabor Asset Management LP bought a new stake in shares of Lithia Motors in the third quarter valued at about $1,722,000. Bridges Investment Management Inc. grew its stake in shares of Lithia Motors by 8.0% in the fourth quarter. Bridges Investment Management Inc. now owns 284,325 shares of the company's stock valued at $94,490,000 after acquiring an additional 21,168 shares in the last quarter. Finally, Natixis Advisors LLC grew its stake in shares of Lithia Motors by 12.9% in the third quarter. Natixis Advisors LLC now owns 142,276 shares of the company's stock valued at $44,959,000 after acquiring an additional 16,226 shares in the last quarter.

Lithia Motors Trading Up 0.4%

NYSE LAD opened at $307.35 on Friday. The company has a market cap of $7.01 billion, a PE ratio of 10.79, a PEG ratio of 0.67 and a beta of 1.26. The company has a current ratio of 0.99, a quick ratio of 0.24 and a debt-to-equity ratio of 1.41. Lithia Motors has a 12 month low of $239.78 and a 12 month high of $360.55. The stock has a 50 day moving average of $289.26 and a 200-day moving average of $295.82.

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

Lithia Motors Increases Dividend

The firm also recently announced a quarterly dividend, which was paid on Friday, May 22nd. Stockholders of record on Friday, May 8th were paid a dividend of $0.57 per share. The ex-dividend date was Friday, May 8th. This represents a $2.28 annualized dividend and a dividend yield of 0.7%. This is an increase from Lithia Motors's previous quarterly dividend of $0.55. Lithia Motors's dividend payout ratio is presently 8.01%.

Lithia Motors declared that its Board of Directors has approved a stock buyback program on Tuesday, May 26th that allows the company to buyback $500.00 million in shares. This buyback authorization allows the company to repurchase up to 7.9% of its stock through open market purchases. Stock buyback programs are often a sign that the company's management believes its stock is undervalued.

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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