Wall Street Zen Upgrades Lithia Motors (NYSE:LAD) to "Hold"

Key Points

• Wall Street Zen upgraded Lithia Motors from “sell” to “hold,” while broader analyst sentiment remains a “Moderate Buy,” with seven buy ratings, five holds and an average price target of $414.70.
• Lithia reported quarterly EPS of $10.03, beating estimates by $1.30, and revenue of $9.79 billion, above expectations; results benefited from stronger used-vehicle margins, aftersales growth and financing income.
• The company authorized a $500 million share repurchase program covering up to 7.9% of outstanding shares, though recent insider sales and concerns that the stock may be roughly 15% above fair value highlight valuation risks.

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 research note issued on Saturday.

A number of other research analysts also recently commented on the company. Citigroup increased 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. JPMorgan Chase & Co. upped their price target on Lithia Motors from $320.00 to $325.00 and gave the company a "neutral" rating in a research report on Thursday, May 7th. Weiss Ratings upgraded Lithia Motors from a "hold (c-)" rating to a "hold (c)" rating in a research note on Tuesday, July 21st. UBS Group downgraded shares of Lithia Motors from a "buy" rating to a "neutral" rating and lifted their price objective for the stock from $370.00 to $440.00 in a report on Thursday. Finally, Bank of America boosted their target price on shares of Lithia Motors from $350.00 to $417.00 and gave the company a "buy" rating in a research note on Thursday, July 9th. Seven investment analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the company. According to MarketBeat.com, Lithia Motors has a consensus rating of "Moderate Buy" and an average price target of $414.70.

Lithia Motors Stock Performance

Shares of Lithia Motors stock opened at $386.74 on Friday. The firm has a market cap of $8.82 billion, a PE ratio of 12.83, a price-to-earnings-growth ratio of 0.89 and a beta of 1.26. The firm's 50-day simple moving average is $313.76 and its 200-day simple moving average is $296.03. The company has a debt-to-equity ratio of 1.46, a quick ratio of 0.24 and a current ratio of 1.00. Lithia Motors has a 1 year low of $239.78 and a 1 year high of $439.49.

Lithia Motors (NYSE:LAD - Get Free Report) last posted its quarterly earnings results on Wednesday, July 29th. The company reported $10.03 EPS for the quarter, topping analysts' consensus estimates of $8.73 by $1.30. The business had revenue of $9.79 billion during the quarter, compared to the consensus estimate of $9.64 billion. Lithia Motors had a return on equity of 12.16% and a net margin of 1.88%.The company's revenue for the quarter was up 2.2% compared to the same quarter last year. During the same period last year, the firm earned $10.24 earnings per share. Equities analysts forecast that Lithia Motors will post 34.48 earnings per share for the current fiscal year.

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

Insiders Place Their Bets

In other news, Director Richard J. Bailey, Jr. sold 297 shares of the business's stock in a transaction on Tuesday, May 26th. The shares were sold at an average price of $280.57, for a total transaction of $83,329.29. Following the completion of the transaction, the director owned 760 shares of the company's stock, valued at approximately $213,233.20. The trade was a 28.10% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which can be accessed through the SEC website. Also, Director Shauna Mcintyre sold 165 shares of the stock in a transaction dated Wednesday, June 10th. The stock was sold at an average price of $305.64, for a total transaction 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 trade represents a 8.94% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 782 shares of company stock worth $229,572 over the last quarter. 1.08% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Lithia Motors

A number of hedge funds have recently made changes to their positions in LAD. Northwestern Mutual Wealth Management Co. grew its position in 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 buying an additional 10,118 shares in the last quarter. Life Cycle Investment Partners Ltd bought a new stake in shares of Lithia Motors during the 4th quarter worth about $58,409,000. Bridges Investment Management Inc. raised its position in shares of Lithia Motors by 8.0% during the 4th quarter. Bridges Investment Management Inc. now owns 284,325 shares of the company's stock worth $94,490,000 after buying an additional 21,168 shares in the last quarter. Intech Investment Management LLC lifted its stake in shares of Lithia Motors by 140.7% in the 4th quarter. Intech Investment Management LLC now owns 11,396 shares of the company's stock worth $3,787,000 after acquiring an additional 6,661 shares during the period. Finally, Independent Advisor Alliance acquired a new stake in shares of Lithia Motors in the 4th quarter worth approximately $1,676,000.

Key Lithia Motors News

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

• Positive Sentiment: Lithia reported quarterly EPS of $10.03, exceeding the $8.73 analyst consensus, while revenue of $9.79 billion also topped estimates. Results benefited from stronger used-vehicle margins, aftersales growth and record financing income despite mixed sales trends. LAD Q2 Earnings Beat on Used Margins and Financing Growth
• Positive Sentiment: Benchmark raised its LAD price target from $400 to $475 and maintained a “buy” rating, implying substantial upside from the recent trading level. Lithia Motors Price Target Raised to $475 at Benchmark
• Positive Sentiment: Wells Fargo increased its price target from $306 to $395, reflecting improved expectations, although it retained an “equal weight” rating. Lithia Motors Given New Price Target at Wells Fargo
• Positive Sentiment: The company raised its quarterly dividend to $0.70 per share from $0.57, a 22.8% increase, with the next ex-dividend date scheduled for August 7. Lithia Motors Dividend Increase
• Neutral Sentiment: Zacks highlighted LAD as a strong momentum stock, while brokerage consensus remains “Moderate Buy,” indicating generally favorable—but not unanimous—analyst sentiment. Why Lithia Motors Is a Strong Momentum Stock
• Negative Sentiment: One post-earnings analysis suggested LAD could be roughly 15% above fair value, raising concerns that the earnings-driven rally may have outpaced the company’s underlying valuation. Lithia Motors Could Be Above Fair Value After Earnings Beat

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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