Zacks Investment Research Lowers Lithia Motors, Inc. (LAD) to Hold

Lithia Motors, Inc. (NYSE:LAD) was downgraded by Zacks Investment Research from a “strong-buy” rating to a “hold” rating in a research note issued on Tuesday.

According to Zacks, “Lithia Motors is expected to benefit from the frequent acquisitions and store openings it has been undertaking. The company has provided a positive outlook for fiscal 2017. Also, its active share repurchase policy will boost its shareholder confidence in the company. Moreover, in the last six months, its shares have outperformed the industry it belongs to. However, Lithia Motors’ extensive merchandise inventory, the year-over-year decline in the gross profit of new vehicles and falling of used car prices are few of its concerns. Also, stiff competition and increasing price transparency may lead to decrease in sales for the company.”

Other research analysts have also recently issued research reports about the company. Jefferies Group LLC restated a “buy” rating and set a $115.00 price objective on shares of Lithia Motors in a research note on Wednesday, June 28th. KeyCorp restated a “buy” rating and set a $130.00 price objective (up previously from $119.00) on shares of Lithia Motors in a research note on Wednesday, October 4th. Berenberg Bank initiated coverage on Lithia Motors in a research note on Wednesday, October 4th. They set a “hold” rating and a $126.00 price objective on the stock. BidaskClub upgraded Lithia Motors from a “sell” rating to a “hold” rating in a research note on Wednesday, July 5th. Finally, Seaport Global Securities initiated coverage on Lithia Motors in a research note on Wednesday, June 14th. They set a “neutral” rating on the stock. One investment analyst has rated the stock with a sell rating, five have assigned a hold rating and four have given a buy rating to the company’s stock. Lithia Motors presently has a consensus rating of “Hold” and an average target price of $116.00.

Shares of Lithia Motors (NYSE:LAD) traded up 0.0569% during midday trading on Tuesday, reaching $117.5469. The company’s stock had a trading volume of 49,133 shares. The firm’s 50 day moving average is $111.97 and its 200 day moving average is $97.99. The firm has a market capitalization of $2.94 billion, a price-to-earnings ratio of 14.1691 and a beta of 1.71. Lithia Motors has a 52 week low of $75.85 and a 52 week high of $123.50.

Lithia Motors (NYSE:LAD) last issued its earnings results on Friday, July 28th. The company reported $2.28 earnings per share for the quarter, beating the Zacks’ consensus estimate of $2.23 by $0.05. The firm had revenue of $2.47 billion for the quarter, compared to analysts’ expectations of $2.45 billion. Lithia Motors had a return on equity of 21.66% and a net margin of 2.26%. The firm’s revenue for the quarter was up 15.6% compared to the same quarter last year. During the same quarter last year, the firm earned $1.96 earnings per share. Equities analysts forecast that Lithia Motors will post $8.61 EPS for the current fiscal year.

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In related news, CEO Bryan B. Deboer sold 20,820 shares of the business’s stock in a transaction dated Tuesday, August 22nd. The stock was sold at an average price of $104.13, for a total value of $2,167,986.60. Following the transaction, the chief executive officer now owns 101,004 shares in the company, valued at $10,517,546.52. The transaction was disclosed in a legal filing with the SEC, which is available at this hyperlink. Also, Director Sidney B. Deboer sold 65,711 shares of the business’s stock in a transaction dated Tuesday, October 3rd. The stock was sold at an average price of $121.77, for a total value of $8,001,628.47. Following the completion of the transaction, the director now owns 1,421 shares in the company, valued at approximately $173,035.17. The disclosure for this sale can be found here. In the last 90 days, insiders have sold 312,981 shares of company stock worth $33,812,652. 7.85% of the stock is currently owned by insiders.

Several large investors have recently added to or reduced their stakes in LAD. First Trust Advisors LP lifted its stake in shares of Lithia Motors by 68.5% in the first quarter. First Trust Advisors LP now owns 20,379 shares of the company’s stock worth $1,745,000 after acquiring an additional 8,286 shares in the last quarter. US Bancorp DE lifted its stake in shares of Lithia Motors by 6.2% in the first quarter. US Bancorp DE now owns 2,994 shares of the company’s stock worth $256,000 after acquiring an additional 174 shares in the last quarter. Karp Capital Management Corp acquired a new position in shares of Lithia Motors in the first quarter worth about $622,000. Parametric Portfolio Associates LLC lifted its stake in shares of Lithia Motors by 11.5% in the first quarter. Parametric Portfolio Associates LLC now owns 90,435 shares of the company’s stock worth $7,746,000 after acquiring an additional 9,293 shares in the last quarter. Finally, Ameritas Investment Partners Inc. acquired a new position in shares of Lithia Motors in the first quarter worth about $176,000. Institutional investors and hedge funds own 98.47% of the company’s stock.

About Lithia Motors

Lithia Motors, Inc is an operator of automotive franchises and a retailer of new and used vehicles and related services. As of February 28, 2017, it offered 30 brands of new vehicles and all brands of used vehicles in 154 stores in the United States and online at Lithia.com, DCHauto.com and CarboneCars.com.

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