Lithia Motors (NYSE:LAD) Stock Price Up 6.8% - Still a Buy?

Key Points

• Lithia Motors shares jumped 6.8% to about $300.67 in light trading, but remained below the 50-day and 200-day moving averages of $342.30 and $313.68, respectively.
• Analyst sentiment remains favorable but mixed: six analysts rate the stock Buy and six rate it Hold, producing a “Moderate Buy” consensus and an average price target of $402.60, despite recent target cuts from Citigroup and Barclays.
• The company exceeded quarterly earnings expectations, reporting $10.03 in EPS and $9.79 billion in revenue, while increasing its quarterly dividend to $0.70 per share from $0.57.

Shares of Lithia Motors, Inc. (NYSE:LAD - Get Free Report) shot up 6.8% during mid-day trading on Thursday. The stock traded as high as $302.23 and last traded at $300.6690. Approximately 36,859 shares were traded during trading, a decline of 88% from the average daily volume of 306,743 shares. The stock had previously closed at $281.49.

Analyst Ratings Changes

Several equities analysts recently issued reports on the company. Weiss Ratings cut Lithia Motors from a "buy (b-)" rating to a "hold (c+)" rating in a research note on Wednesday. Citigroup lowered their target price on shares of Lithia Motors from $455.00 to $409.00 and set a "buy" rating for the company in a research note on Tuesday, September 22nd. Barclays dropped their target price on shares of Lithia Motors from $415.00 to $375.00 and set an "overweight" rating on the stock in a report on Tuesday, October 6th. Wall Street Zen raised shares of Lithia Motors from a "sell" rating to a "hold" rating in a report on Saturday, August 1st. Finally, Bank of America raised 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. Six investment analysts have rated the stock with a Buy rating and six have issued a Hold rating to the stock. According to data from MarketBeat.com, the stock currently has a consensus rating of "Moderate Buy" and a consensus price target of $402.60.

Lithia Motors Price Performance

The company has a debt-to-equity ratio of 1.46, a quick ratio of 0.21 and a current ratio of 1.00. The firm has a market capitalization of $6.58 billion, a P/E ratio of 9.92, a price-to-earnings-growth ratio of 0.61 and a beta of 1.27. The business has a fifty day moving average of $342.30 and a 200-day moving average of $313.68.

Lithia Motors (NYSE:LAD - Get Free Report) last announced its earnings results on Wednesday, July 29th. The company reported $10.03 earnings per share for the quarter, beating the consensus estimate of $8.73 by $1.30. Lithia Motors had a return on equity of 12.16% and a net margin of 1.88%. The firm had revenue of $9.79 billion for the quarter, compared to the consensus estimate of $9.64 billion. During the same quarter in the previous year, the business earned $10.24 EPS. The firm's revenue for the quarter was up 2.2% on a year-over-year basis. On average, sell-side analysts forecast that Lithia Motors, Inc. will post 35.70 EPS for the current fiscal year.

Lithia Motors Increases Dividend

The business also recently disclosed a quarterly dividend, which was paid on Friday, August 21st. Investors of record on Friday, August 7th were paid a dividend of $0.70 per share. This is an increase from Lithia Motors's previous quarterly dividend of $0.57. This represents a $2.80 dividend on an annualized basis and a dividend yield of 0.9%. The ex-dividend date was Friday, August 7th. Lithia Motors's dividend payout ratio (DPR) is presently 9.29%.

Insider Buying and Selling at Lithia Motors

In related news, Director Stacy Congdon sold 75 shares of the company's stock in a transaction dated Friday, September 11th. The shares were sold at an average price of $370.73, for a total value of $27,804.75. Following the completion of the sale, the director owned 2,300 shares of the company's stock, valued at $852,679. This represents a 3.16% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 1.08% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Lithia Motors

Several large investors have recently bought and sold shares of the stock. NorthCrest Asset Manangement LLC bought a new position in shares of Lithia Motors during the 3rd quarter valued at about $230,000. GAMMA Investing LLC raised its holdings in shares of Lithia Motors by 145.1% in the 3rd quarter. GAMMA Investing LLC now owns 424 shares of the company's stock worth $124,000 after purchasing an additional 251 shares in the last quarter. Farther Finance Advisors LLC raised its holdings in shares of Lithia Motors by 76.7% in the 3rd quarter. Farther Finance Advisors LLC now owns 182 shares of the company's stock worth $53,000 after purchasing an additional 79 shares in the last quarter. Versant Capital Management Inc raised its holdings in shares of Lithia Motors by 46.5% in the 3rd quarter. Versant Capital Management Inc now owns 186 shares of the company's stock worth $54,000 after purchasing an additional 59 shares in the last quarter. Finally, QRG Capital Management Inc. lifted its stake in Lithia Motors by 5.3% during the second quarter. QRG Capital Management Inc. now owns 2,165 shares of the company's stock valued at $629,000 after purchasing an additional 109 shares during the last quarter.

Lithia Motors Company Profile

Lithia Motors, Inc, doing business as Lithia & Driveway NYSE: LAD, is an automotive retailer that operates a network of franchised dealerships and other vehicle-sales businesses. The company sells new and used vehicles from a broad range of automobile manufacturers, including domestic, import and luxury brands.

In addition to vehicle sales, Lithia & Driveway provides automotive financing and insurance products, maintenance and repair services, replacement parts, collision services and other related offerings.

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