Lithia Motors (NYSE:LAD) Downgraded by Wall Street Zen to "Sell"

Key Points

• Wall Street Zen downgraded Lithia Motors from “hold” to “sell,” even as other analysts remain more constructive overall. The stock’s consensus rating is still “Moderate Buy” with a $368.11 target price.
• Lithia Motors recently beat earnings estimates, reporting $7.34 EPS versus $7.06 expected and revenue of $9.27 billion, slightly above forecasts. Quarterly revenue rose 1.0% year over year.
• The company authorized a $500 million share repurchase program, allowing it to buy back up to 7.9% of its shares. The move may signal management believes the stock is undervalued.

Lithia Motors (NYSE:LAD - Get Free Report) was downgraded by analysts at Wall Street Zen from a "hold" rating to a "sell" rating in a research report issued to clients and investors on Saturday.

Other analysts also recently issued reports about the stock. Zacks Research raised shares of Lithia Motors from a "strong sell" rating to a "hold" rating in a report on Thursday, April 23rd. Citigroup raised their target price on shares of Lithia Motors from $326.00 to $365.00 and gave the stock a "buy" rating in a report on Friday, May 1st. Weiss Ratings downgraded Lithia Motors from a "hold (c)" rating to a "hold (c-)" rating in a report on Monday, May 4th. Bank of America reduced their price objective on shares of Lithia Motors from $335.00 to $320.00 in a research report on Monday, April 13th. Finally, 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. Seven equities research analysts have rated the stock with a Buy rating and five have issued a Hold rating to the company. Based on data from MarketBeat.com, Lithia Motors currently has an average rating of "Moderate Buy" and a consensus target price of $368.11.

Lithia Motors Price Performance

Shares of NYSE:LAD opened at $291.99 on Friday. The company has a 50 day moving average of $287.58 and a 200 day moving average of $297.38. 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 market cap of $6.66 billion, a P/E ratio of 10.25, a P/E/G ratio of 0.65 and a beta of 1.26.

Lithia Motors (NYSE:LAD - Get Free Report) last released 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. Lithia Motors had a net margin of 1.88% and a return on equity of 12.49%. The firm had revenue of $9.27 billion for the quarter, compared to analysts' expectations of $9.22 billion. During the same quarter in the prior year, the firm posted $7.66 earnings per share. The business's quarterly revenue was up 1.0% on a year-over-year basis. As a group, sell-side analysts forecast that Lithia Motors will post 34.37 EPS for the current fiscal year.

Lithia Motors declared that its Board of Directors has authorized a share repurchase program 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 stock through open market purchases. Stock repurchase programs are often an indication that the company's leadership believes its shares are undervalued.

Insider Buying and Selling at Lithia Motors

In other news, Director Richard J. Bailey, Jr. sold 297 shares of the company's stock in a transaction on Tuesday, May 26th. The stock was sold at an average price of $280.57, for a total transaction of $83,329.29. Following 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 sale was disclosed in a document filed with the SEC, which is available through the SEC website. Also, Director Shauna Mcintyre sold 245 shares of the business's stock in a transaction dated Monday, May 11th. The stock was 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 position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold 782 shares of company stock valued at $229,572 in the last 90 days. Company insiders own 1.08% of the company's stock.

Hedge Funds Weigh In On Lithia Motors

A number of institutional investors and hedge funds have recently made changes to their positions in the business. Norges Bank purchased a new position in shares of Lithia Motors during the 4th quarter valued at $125,214,000. River Road Asset Management LLC grew its stake in shares of Lithia Motors by 33.6% in the 4th quarter. River Road Asset Management LLC now owns 742,677 shares of the company's stock worth $246,814,000 after buying an additional 186,628 shares in the last quarter. Life Cycle Investment Partners Ltd bought a new stake in Lithia Motors during the fourth quarter worth approximately $58,409,000. Corient Private Wealth LLC increased its position in shares of Lithia Motors by 8,474.0% during the 4th quarter. Corient Private Wealth LLC now owns 107,690 shares of the company's stock valued at $35,789,000 after purchasing an additional 106,434 shares during the last quarter. Finally, Marshall Wace LLP increased its position in Lithia Motors by 183.6% during the fourth quarter. Marshall Wace LLP now owns 162,937 shares of the company's stock valued at $54,149,000 after acquiring an additional 105,478 shares during the last quarter.

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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