Lithia Motors, Inc. (NYSE:LAD) has received a consensus rating of “Moderate Buy” from eleven research firms currently covering the company. According to Marketbeat, three analysts recommend holding the stock, while seven suggest buying it, and one has assigned a strong buy rating. The average 12-month price target among these brokerages stands at $389.10.
Recent assessments of Lithia Motors have varied. On October 15, 2023, Wells Fargo & Company increased its price target from $317.00 to $327.00, maintaining an “equal weight” rating. Similarly, Barclays initiated coverage on November 12, 2023, assigning an “overweight” rating with a target price of $410.00. In contrast, Weiss Ratings downgraded Lithia Motors from a “buy (b-)” to a “hold (c+)” rating on October 8, 2023.
In another analysis, Guggenheim revised its price objective for Lithia Motors from $383.00 to $380.00 while maintaining a “buy” rating. Meanwhile, on October 14, 2023, JPMorgan Chase & Co. raised its price target from $320.00 to $350.00, reiterating an “overweight” rating.
Recent Financial Performance
Lithia Motors recently announced its quarterly earnings on October 22, 2023. The company reported earnings per share (EPS) of $9.50, surpassing analysts’ expectations of $8.53 by $0.97. The firm achieved a net margin of 2.39% and a return on equity of 13.42%. Revenue for the quarter totaled $9.68 billion, exceeding analyst estimates of $9.38 billion. This figure also reflects a 4.9% increase compared to the same quarter last year, when Lithia Motors posted an EPS of $8.21.
Analysts predict that Lithia Motors will report an EPS of $34.45 for the current fiscal year, which signals confidence in the company’s growth trajectory.
Share Repurchase and Dividend Announcements
On August 26, 2023, Lithia Motors’ Board of Directors approved a share repurchase plan, allowing the company to buy back up to $750 million in outstanding shares. This plan enables the company to reacquire as much as 9% of its stock through open market purchases, indicating the board’s belief that the company’s shares are undervalued.
Additionally, Lithia Motors disclosed a quarterly dividend of $0.55 per share, which was paid on November 21, 2023. The dividend applies to investors of record as of November 7, 2023, marking an annualized dividend of $2.20 and reflecting a yield of 0.7%. The company’s current dividend payout ratio (DPR) is 6.37%.
Institutional Investor Activity
Recent movements among institutional investors have influenced Lithia Motors’ stock. JPMorgan Chase & Co. increased its ownership by 6.9% in the third quarter, acquiring an additional 15,832 shares, bringing its total holdings to 244,598 shares, valued at approximately $77.3 million.
Also, CIBC Private Wealth Group LLC raised its stake in Lithia Motors by 1.3%, owning 41,081 shares valued at $12.98 million. CIBC Bancorp USA Inc. entered a new position in the third quarter, and Coldstream Capital Management Inc. boosted its stake by 36.6%, acquiring 855 shares valued at $270,000. Lastly, Danske Bank A S also acquired a new stake in Lithia Motors during this period.
Lithia Motors operates as a prominent automotive retailer with a diverse range of services, including the sale of new and used vehicles, parts and repair services, vehicle financing, and insurance products. The company also provides financing solutions for customers leasing or purchasing vehicles.
