Lithia Motors (NYSE:LAD) Price Target Lowered to $385.00 at Bank of America

Key Points

• Bank of America has lowered its price target for Lithia Motors from $500 to $385 while maintaining a "buy" rating, indicating a potential upside of 12.79% from the current stock price.
• Despite mixed sentiments from various research analysts, the average rating remains a "Moderate Buy" with a consensus price target of $370.45.
• Lithia Motors announced a $750 million stock buyback plan, reflecting the company's belief that its stock is undervalued.

Lithia Motors (NYSE:LAD - Free Report) had its price target cut by Bank of America from $500.00 to $385.00 in a research report released on Wednesday morning,Benzinga reports. They currently have a buy rating on the stock.

Several other brokerages have also recently issued reports on LAD. The Goldman Sachs Group assumed coverage on Lithia Motors in a research note on Tuesday, June 3rd. They issued a "neutral" rating and a $340.00 price target for the company. Wells Fargo & Company cut their price target on Lithia Motors from $364.00 to $317.00 and set an "equal weight" rating for the company in a research note on Wednesday, July 30th. Guggenheim cut their price target on Lithia Motors from $383.00 to $380.00 and set a "buy" rating for the company in a research note on Monday, August 11th. Jefferies Financial Group assumed coverage on shares of Lithia Motors in a research report on Thursday, September 4th. They set a "buy" rating and a $400.00 price objective for the company. Finally, JPMorgan Chase & Co. lowered their price objective on shares of Lithia Motors from $335.00 to $315.00 and set an "overweight" rating for the company in a research report on Tuesday, August 5th. Eight investment analysts have rated the stock with a Buy rating and three have given a Hold rating to the company. According to data from MarketBeat.com, Lithia Motors has a consensus rating of "Moderate Buy" and a consensus price target of $370.45.

Lithia Motors Stock Performance

Shares of NYSE:LAD traded down $9.66 during trading on Wednesday, reaching $334.34. 234,700 shares of the stock were exchanged, compared to its average volume of 287,090. Lithia Motors has a 12 month low of $262.10 and a 12 month high of $405.67. The firm has a market cap of $8.57 billion, a PE ratio of 9.91, a PEG ratio of 0.70 and a beta of 1.31. The stock has a 50-day moving average price of $319.94 and a 200-day moving average price of $313.74. The company has a current ratio of 1.22, a quick ratio of 0.29 and a debt-to-equity ratio of 1.24.

Lithia Motors (NYSE:LAD - Get Free Report) last issued its quarterly earnings data on Tuesday, July 29th. The company reported $10.24 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $9.78 by $0.46. The company had revenue of $9.58 billion during the quarter, compared to analysts' expectations of $9.56 billion. Lithia Motors had a return on equity of 13.21% and a net margin of 2.39%. Research analysts expect that Lithia Motors will post 34.45 EPS for the current fiscal year.

Lithia Motors Dividend Announcement

The business also recently declared a quarterly dividend, which was paid on Friday, August 22nd. Stockholders of record on Friday, August 8th were issued a dividend of $0.55 per share. The ex-dividend date was Friday, August 8th. This represents a $2.20 annualized dividend and a dividend yield of 0.7%. Lithia Motors's dividend payout ratio is 6.52%.

Lithia Motors declared that its Board of Directors has initiated a stock repurchase program on Tuesday, August 26th that authorizes the company to buyback $750.00 million in shares. This buyback authorization authorizes the company to purchase up to 9% of its stock through open market purchases. Stock buyback programs are usually a sign that the company's board believes its shares are undervalued.

Insider Activity

In other news, Director Shauna Mcintyre sold 256 shares of the company's stock in a transaction on Thursday, July 31st. The shares were sold at an average price of $293.05, for a total transaction of $75,020.80. Following the completion of the transaction, the director directly owned 1,376 shares in the company, valued at approximately $403,236.80. This represents a 15.69% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. Company insiders own 0.87% of the company's stock.

Institutional Inflows and Outflows

Several institutional investors have recently modified their holdings of the stock. Bessemer Group Inc. increased its holdings in Lithia Motors by 114.6% in the second quarter. Bessemer Group Inc. now owns 88 shares of the company's stock valued at $29,000 after purchasing an additional 47 shares during the period. Hantz Financial Services Inc. increased its holdings in Lithia Motors by 1,383.3% in the second quarter. Hantz Financial Services Inc. now owns 89 shares of the company's stock valued at $30,000 after purchasing an additional 83 shares during the period. Parallel Advisors LLC increased its holdings in Lithia Motors by 106.2% in the second quarter. Parallel Advisors LLC now owns 134 shares of the company's stock valued at $45,000 after purchasing an additional 69 shares during the period. eCIO Inc. acquired a new stake in Lithia Motors in the first quarter valued at $55,000. Finally, NBC Securities Inc. acquired a new stake in Lithia Motors in the first quarter valued at $59,000.

About Lithia Motors

Lithia Motors, Inc operates as an automotive retailer worldwide. It operates in two segments, Vehicle Operations and Financing Operations. The company's Vehicle Operations segment sells new and used vehicles; provides parts, repair, and maintenance services; vehicle finance; and insurance products. Its Financing Operations segment provides financing to customers buying and leasing retail vehicles.