Zacks Downgrades Lithia Motors to Hold

(Ticker Report) – Lithia Motors (NYSE:LAD) was downgraded by Zacks Investment Research from a “strong-buy” rating to a “hold” rating in a research report issued to clients and investors on Wednesday, Zacks.com reports.

They currently have a $273.00 price objective on the stock. Zacks Investment Research‘s price objective indicates a potential upside of 9.13% from the stock’s current price.

According to Zacks, “Lithia’s diversified product mix and multiple streams of income reduce its risk profile and bode well for top and bottom-line growth. Expanded physical network and enhanced digital solutions will help Lithia to further boost profitability and market presence. Lithia’s acquisition of dealerships helps to increase its market share and positions it for long term growth. The firm’s cost cut efforts and stable dividend payouts are other tailwinds.

However, the firm’s elevated leverage restricts its financial flexibility. Also, rising competition in the used car market and increasing price transparency can result in lower selling prices, thereby affecting Lithia’s profits. Moreover, coronavirus-led sluggish demand may dent the earnings of the auto retailer. As such, the stock warrants a cautious stance right now.”

A number of other equities analysts also recently issued reports on LAD. Guggenheim upped their price target on Lithia Motors from $233.00 to $275.00 and gave the company a “buy” rating in a report on Wednesday, August 12th. Morgan Stanley upped their price target on Lithia Motors from $180.00 to $250.00 and gave the company an “overweight” rating in a report on Monday, July 27th. Seaport Global Securities started coverage on Lithia Motors in a report on Monday. They issued a “buy” rating and a $305.00 price target for the company. Benchmark increased their price objective on Lithia Motors from $240.00 to $285.00 and gave the company a “buy” rating in a report on Thursday, August 27th. Finally, ValuEngine raised Lithia Motors from a “sell” rating to a “hold” rating in a report on Monday, August 3rd. One investment analyst has rated the stock with a sell rating, two have assigned a hold rating and seven have given a buy rating to the company’s stock. Lithia Motors currently has a consensus rating of “Buy” and a consensus price target of $262.11.

LAD stock opened at $250.15 on Wednesday. The company’s 50 day moving average price is $250.45 and its 200 day moving average price is $179.07. The company has a debt-to-equity ratio of 0.89, a quick ratio of 0.30 and a current ratio of 1.20. The firm has a market capitalization of $6.41 billion, a price-to-earnings ratio of 21.06, a PEG ratio of 0.77 and a beta of 1.84. Lithia Motors has a fifty-two week low of $55.74 and a fifty-two week high of $288.56.

Lithia Motors (NYSE:LAD) last announced its quarterly earnings results on Wednesday, October 21st. The company reported $6.89 earnings per share (EPS) for the quarter, beating the Zacks’ consensus estimate of $6.21 by $0.68. The firm had revenue of $3.62 billion during the quarter, compared to the consensus estimate of $3.58 billion. Lithia Motors had a return on equity of 19.36% and a net margin of 2.28%. The firm’s quarterly revenue was up 8.6% compared to the same quarter last year. During the same period in the prior year, the company posted $3.39 earnings per share. Equities analysts forecast that Lithia Motors will post 16.3 EPS for the current fiscal year.

In other Lithia Motors news, CEO Bryan B. Deboer sold 16,017 shares of the stock in a transaction on Thursday, August 13th. The stock was sold at an average price of $260.62, for a total value of $4,174,350.54. Following the completion of the transaction, the chief executive officer now owns 218,041 shares in the company, valued at $56,825,845.42. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this hyperlink.

Also, Director Shauna Mcintyre sold 225 shares of the stock in a transaction on Tuesday, August 18th. The stock was sold at an average price of $273.57, for a total value of $61,553.25. Following the completion of the transaction, the director now owns 2,490 shares of the company’s stock, valued at approximately $681,189.30. The disclosure for this sale can be found here. Over the last ninety days, insiders have sold 30,464 shares of company stock valued at $7,596,831. Corporate insiders own 3.95% of the company’s stock.

Large investors have recently added to or reduced their stakes in the business. USA Financial Portformulas Corp purchased a new position in Lithia Motors in the third quarter worth $33,000. NEXT Financial Group Inc purchased a new position in Lithia Motors in the third quarter worth $50,000. Cerebellum GP LLC purchased a new position in Lithia Motors in the third quarter worth $66,000. Glenmede Trust Co. NA raised its position in Lithia Motors by 49.1% in the second quarter. Glenmede Trust Co. NA now owns 346 shares of the company’s stock worth $52,000 after acquiring an additional 114 shares in the last quarter. Finally, Orion Portfolio Solutions LLC purchased a new position in Lithia Motors in the second quarter worth $76,000.

Lithia Motors Company Profile

Lithia Motors, Inc operates as an automotive retailer in the United States. The company operates through three segments: Domestic, Import, and Luxury. It offers new and used vehicles; vehicle financing services; warranties, insurance contracts, and vehicle and theft protection services; and automotive repair and maintenance services, as well as sells vehicle body and parts.