Lithia Motors (NYSE:LAD) Stock Price Expected to Rise, Benchmark Analyst Says

Key Points

• Benchmark raised Lithia Motors’ price target to $475 from $400 and maintained a “buy” rating, implying 17.03% upside from the stock’s recent $405.89 price. Analysts overall give the company a “Moderate Buy” consensus with an average target of $414.70.
• Lithia reported quarterly EPS of $10.03, exceeding expectations, while revenue rose 2.2% year over year to $9.79 billion. Improved used-vehicle margins, aftersales performance and financing income supported the results.
• The company authorized a $500 million share-repurchase program, covering up to 7.9% of shares, although recent insider selling and some analyst caution present potential headwinds.

Lithia Motors (NYSE:LAD - Get Free Report) had its price target hoisted by research analysts at Benchmark from $400.00 to $475.00 in a report released on Thursday,Benzinga reports. The firm currently has a "buy" rating on the stock. Benchmark's price objective suggests a potential upside of 17.03% from the company's current price.

Several other research analysts also recently commented on the company. Citigroup boosted their target price on Lithia Motors from $326.00 to $365.00 and gave the stock a "buy" rating in a report on Friday, May 1st. Wells Fargo & Company lifted their price target on shares of Lithia Motors from $306.00 to $395.00 and gave the stock an "equal weight" rating in a research report on Thursday. JPMorgan Chase & Co. upped their price objective on Lithia Motors from $320.00 to $325.00 and gave the company a "neutral" rating in a report on Thursday, May 7th. Bank of America lifted their price target on shares of Lithia Motors from $350.00 to $417.00 and gave the stock a "buy" rating in a research report on Thursday, July 9th. Finally, Barclays dropped their price objective on Lithia Motors from $370.00 to $360.00 and set an "overweight" rating on the stock in a research note on Wednesday, July 15th. Seven equities research analysts have rated the stock with a Buy rating and five have given a Hold rating to the company's stock. Based on data from MarketBeat, Lithia Motors currently has an average rating of "Moderate Buy" and a consensus target price of $414.70.

Lithia Motors Stock Performance

Shares of LAD traded down $21.59 during trading hours on Thursday, reaching $405.89. 552,654 shares of the company traded hands, compared to its average volume of 320,070. The stock's fifty day moving average is $308.92 and its 200 day moving average is $294.90. The company has a debt-to-equity ratio of 1.41, a quick ratio of 0.24 and a current ratio of 0.99. Lithia Motors has a 1-year low of $239.78 and a 1-year high of $439.49. The stock has a market cap of $9.26 billion, a P/E ratio of 14.22, a price-to-earnings-growth ratio of 0.84 and a beta of 1.26.

Lithia Motors (NYSE:LAD - Get Free Report) last announced its quarterly earnings results on Wednesday, July 29th. The company reported $10.03 earnings per share (EPS) for the quarter, beating the consensus estimate of $8.73 by $1.30. Lithia Motors had a net margin of 1.88% and a return on equity of 12.49%. The firm had revenue of $9.79 billion for the quarter, compared to analyst estimates of $9.64 billion. During the same quarter in the previous year, the firm posted $10.24 EPS. The business's revenue for the quarter was up 2.2% on a year-over-year basis. Equities research analysts anticipate that Lithia Motors will post 34.19 earnings per share for the current fiscal year.

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

Insider Activity

In related news, Director Richard J. Bailey, Jr. sold 297 shares of the 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 transaction, the director directly owned 760 shares in the company, valued at approximately $213,233.20. This trade represents a 28.10% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, Director Shauna Mcintyre sold 165 shares of Lithia Motors stock in a transaction that occurred on Wednesday, June 10th. The shares were sold at an average price of $305.64, for a total value of $50,430.60. Following the completion of the sale, the director directly owned 1,681 shares in the company, valued at approximately $513,780.84. This represents a 8.94% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 782 shares of company stock worth $229,572 in the last three months. Company insiders own 1.08% of the company's stock.

Institutional Trading of Lithia Motors

A number of hedge funds and other institutional investors have recently made changes to their positions in the business. Northwestern Mutual Wealth Management Co. grew its holdings in shares of Lithia Motors by 1,062.8% in the 4th quarter. Northwestern Mutual Wealth Management Co. now owns 11,070 shares of the company's stock valued at $3,679,000 after acquiring an additional 10,118 shares in the last quarter. Life Cycle Investment Partners Ltd bought a new stake in Lithia Motors during the fourth quarter worth about $58,409,000. Bridges Investment Management Inc. boosted its position in Lithia Motors by 8.0% during the fourth quarter. Bridges Investment Management Inc. now owns 284,325 shares of the company's stock valued at $94,490,000 after purchasing an additional 21,168 shares during the last quarter. Intech Investment Management LLC grew its stake in Lithia Motors by 140.7% in the fourth quarter. Intech Investment Management LLC now owns 11,396 shares of the company's stock valued at $3,787,000 after purchasing an additional 6,661 shares in the last quarter. Finally, Leonteq Securities AG increased its position in shares of Lithia Motors by 570.8% during the 1st quarter. Leonteq Securities AG now owns 7,386 shares of the company's stock worth $1,844,000 after purchasing an additional 6,285 shares during the last quarter.

Lithia Motors News Summary

Here are the key news stories impacting Lithia Motors this week:

• Positive Sentiment: Quarterly results exceeded expectations. Lithia reported $9.8 billion in record revenue, up 2.2% year over year, while adjusted earnings per share reached $10.03 versus the $8.67–$8.73 consensus range. Results were helped by stronger used-vehicle margins, aftersales growth and record financing income. LAD Q2 Earnings Beat on Used Margins and Financing Growth
• Positive Sentiment: Profitability metrics improved. Used retail gross profit per unit increased 20% sequentially to $339 higher, aftersales gross margin expanded to 59.2%, and adjusted selling, general and administrative costs improved as a percentage of gross profit. Financing operations generated a record $37 million of income on $884 million of originations. Lithia & Driveway Second-Quarter Results
• Positive Sentiment: Shareholder returns were increased. Lithia raised its quarterly dividend 22.8% to $0.70 per share and repurchased $242 million of stock during the quarter, equal to 3.7% of shares outstanding. These actions likely reinforced investor enthusiasm and contributed to the stock reaching a record high. Lithia Motors Shares Rally on Record Revenue and Dividend Hike
• Neutral Sentiment: Brokerages collectively maintain a “Moderate Buy” recommendation, indicating generally favorable sentiment but not an overwhelming consensus. Consensus Recommendation
• Negative Sentiment: Valuation and analyst caution are potential headwinds. Wells Fargo raised its price target to $395 but retained an “equal weight” rating, implying limited upside at recent levels. A separate analysis suggested LAD could be approximately 15% above fair value following the earnings-driven rally. Wells Fargo Price Target Update Lithia Motors Fair Value Analysis

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.