Lithia Motors (NYSE:LAD) Rating Increased to Hold at Wall Street Zen

Key Points

• Wall Street Zen upgraded Lithia Motors from “sell” to “hold,” adding to a mixed analyst backdrop that now includes a consensus rating of Moderate Buy and an average target price of $365.30.
• The company reported better-than-expected Q1 earnings of $7.34 per share versus $7.06 expected, with revenue of $9.27 billion slightly topping estimates and rising 1.0% year over year.
• Lithia Motors also announced a $500 million stock buyback program covering up to 7.9% of shares, even as several insiders recently sold small portions of their holdings.

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

Several other equities research analysts also recently commented on the company. Wells Fargo & Company upped their target price on Lithia Motors from $293.00 to $305.00 and gave the company an "equal weight" rating in a report on Thursday, April 30th. Zacks Research raised Lithia Motors from a "strong sell" rating to a "hold" rating in a report on Thursday, April 23rd. Barclays reduced their target price on Lithia Motors from $380.00 to $370.00 and set an "overweight" rating for the company in a report on Tuesday, April 7th. Bank of America reduced their target price on Lithia Motors from $335.00 to $320.00 in a report on Monday, April 13th. Finally, JPMorgan Chase & Co. upped their target price on Lithia Motors from $320.00 to $325.00 and gave the company a "neutral" rating in a report on Thursday, May 7th. One research analyst has rated the stock with a Strong Buy rating, six have given a Buy rating and six have assigned a Hold rating to the company. According to data from MarketBeat.com, the company presently has an average rating of "Moderate Buy" and a consensus target price of $365.30.

Lithia Motors Trading Down 1.7%

Shares of LAD stock opened at $290.59 on Friday. The stock has a 50-day simple moving average of $271.40 and a 200 day simple moving average of $298.57. Lithia Motors has a fifty-two week low of $239.78 and a fifty-two week high of $360.55. The stock has a market capitalization of $6.63 billion, a P/E ratio of 10.20, a P/E/G ratio of 0.65 and a beta of 1.28. 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 announced 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 return on equity of 12.49% and a net margin of 1.88%.The business had revenue of $9.27 billion during the quarter, compared to analysts' expectations of $9.22 billion. During the same quarter last year, the business posted $7.66 earnings per share. The company's quarterly revenue was up 1.0% on a year-over-year basis. On average, sell-side analysts expect that Lithia Motors will post 34.26 earnings per share for the current fiscal year.

Lithia Motors announced that its Board of Directors has initiated a stock repurchase program on Tuesday, May 26th that allows the company to repurchase $500.00 million in shares. This repurchase authorization allows the company to purchase up to 7.9% of its shares through open market purchases. Shares repurchase programs are generally an indication that the company's management believes its shares are undervalued.

Insider Activity

In other news, Director Richard J. Bailey, Jr. sold 297 shares of the firm's stock in a transaction dated Tuesday, May 26th. The stock was sold at an average price of $280.57, for a total transaction of $83,329.29. Following the completion of the sale, the director directly owned 760 shares of the company's stock, valued at $213,233.20. This trade represents a 28.10% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this hyperlink. Also, Director Shauna Mcintyre sold 245 shares of the firm'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 sale, the director directly owned 1,846 shares of the company's stock, valued at $543,905.44. This trade represents a 11.72% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last three months, insiders sold 617 shares of company stock valued at $174,966. Company insiders own 1.08% of the company's stock.

Institutional Investors Weigh In On Lithia Motors

A number of hedge funds and other institutional investors have recently made changes to their positions in LAD. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. raised its stake in shares of Lithia Motors by 13.9% during the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 8,474 shares of the company's stock worth $2,487,000 after purchasing an additional 1,032 shares in the last quarter. Goldman Sachs Group Inc. grew its holdings in Lithia Motors by 67.6% in the 1st quarter. Goldman Sachs Group Inc. now owns 113,346 shares of the company's stock valued at $33,272,000 after buying an additional 45,716 shares during the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC lifted its position in shares of Lithia Motors by 16.8% in the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 93,170 shares of the company's stock worth $27,349,000 after acquiring an additional 13,407 shares during the period. Federated Hermes Inc. lifted its position in shares of Lithia Motors by 16.2% in the 2nd quarter. Federated Hermes Inc. now owns 2,430 shares of the company's stock worth $821,000 after acquiring an additional 338 shares during the period. Finally, WINTON GROUP Ltd bought a new stake in shares of Lithia Motors in the 2nd quarter worth approximately $651,000.

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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