Lithia (LAD) to Grow From Store Openings & Acquisitions

On Feb 23, we issued an updated research report on Lithia Motors, Inc. LAD.

On Feb 14, the company announced fourth-quarter and full-year 2017 results. It reported adjusted earnings per share of $2.15 in fourth-quarter 2017, beating the Zacks Consensus Estimate of $2.10. Quarterly revenues rose 18% to $2.7 billion. The top line also surpassed the Zacks Consensus Estimate of $2.68 billion. Further, the company anticipates a positive outlook for 2018.

For 2018, Lithia Motors projects revenues to be in the range of $11-$11.5 billion, a rise from $10.1 billion generated in 2017. Also, adjusted earnings per share are expected to be $10.5, as against $8.39 in 2017. These positive expectations are on the back of lower tax rates and improved operations during the year.

 

Lithia Motors, Inc. Price and Consensus

 

Lithia Motors, Inc. Price and Consensus | Lithia Motors, Inc. Quote

 

Earnings estimates for Lithia Motors have been going up lately. The Zacks Consensus Estimate for annual earnings for the stock has been revised 4.3% upward, in the last seven days.

The company is poised to benefit from its business expansion through acquisitions and store openings. In 2017, Lithia Motors acquired a total of 18 stores and opened one, which is expected to generate annualized revenue of over $1.7 billion.

Also, in order to boost shareholders confidence in the company, its management pursues regular quarterly cash dividend payment. For fourth-quarter 2017, the company will pay a dividend of 27 cents on Mar 23, to shareholders of record on Mar 9, 2018.

Price Performance

Over a year, shares of Lithia Motors’ have outperformed the industry it belongs to. During the time period, the company’s stock gained 12.3% in comparison with the industry’s rally of 5%.

 

Zacks Rank & Other Key Picks

Lithia Motors has a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the auto space are General Motors Company GM, PACCAR, Inc. PCAR and Penske Automotive Group, Inc. PAG each carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

General Motors has an expected long-term growth rate of 8.4%. In the last six months, shares of the company have gained 15.2%.

PACCAR has an expected long-term growth rate of 10%. In the last six months, shares of the company have gained 10.7%.

Penske Automotive has an expected long-term growth rate of 10%. In the last three months, shares of the company have gained 3.4%.

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