Lithia Motors (NYSE:LAD) Sets New 12-Month High Following Dividend Announcement

Lithia Motors, Inc. (NYSE:LAD) hit a new 52-week high during mid-day trading on Tuesday following a dividend announcement from the company. The company traded as high as $361.24 and last traded at $358.0240, with a volume of 422131 shares changing hands. The stock had previously closed at $345.48.

The newly announced dividend which will be paid on Friday, August 21st. Investors of record on Friday, August 7th will be paid a $0.70 dividend. This represents a $2.80 annualized dividend and a dividend yield of 0.7%. The ex-dividend date is Friday, August 7th. This is a positive change from Lithia Motors’s previous quarterly dividend of $0.57. Lithia Motors’s dividend payout ratio (DPR) is 8.01%.

Wall Street Analysts Forecast Growth

A number of brokerages recently issued reports on LAD. Zacks Research raised shares of Lithia Motors from a “strong sell” rating to a “hold” rating in a research report on Thursday, April 23rd. Wells Fargo & Company lifted their target price on shares of Lithia Motors from $306.00 to $395.00 and gave the company an “equal weight” rating in a report on Thursday. Barclays dropped their price target on Lithia Motors from $370.00 to $360.00 and set an “overweight” rating on the stock in a research report on Wednesday, July 15th. UBS Group downgraded Lithia Motors from a “buy” rating to a “neutral” rating and upped their price target for the stock from $370.00 to $440.00 in a research note on Thursday. Finally, Jefferies Financial Group reiterated a “buy” rating and set a $490.00 price objective on shares of Lithia Motors in a research note on Thursday. Seven analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the company. According to MarketBeat, the stock has a consensus rating of “Moderate Buy” and an average price target of $414.70.

Lithia Motors Trading Down 4.8%

The stock’s fifty day moving average price is $308.92 and its 200 day moving average price is $294.90. The company has a quick ratio of 0.24, a current ratio of 0.99 and a debt-to-equity ratio of 1.41. The stock has a market cap of $9.28 billion, a PE ratio of 14.28, a PEG ratio of 0.84 and a beta of 1.26.

Lithia Motors (NYSE:LAD) last released its quarterly earnings data on Wednesday, July 29th. The company reported $10.03 earnings per share (EPS) for the quarter, beating the consensus estimate of $8.73 by $1.30. Lithia Motors had a return on equity of 12.49% and a net margin of 1.88%.The business had revenue of $9.79 billion for the quarter, compared to analysts’ expectations of $9.64 billion. During the same period in the prior year, the firm posted $10.24 EPS. The firm’s quarterly revenue was up 2.2% on a year-over-year basis. On average, sell-side analysts forecast that Lithia Motors, Inc. will post 34.19 EPS for the current year.

Lithia Motors News Roundup

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

• Positive Sentiment: Quarterly results exceeded expectations. Lithia reported $9.8 billion in record revenue, up 2.2% year over year, while adjusted earnings per share reached $10.03 versus the $8.67–$8.73 consensus range. Results were helped by stronger used-vehicle margins, aftersales growth and record financing income. LAD Q2 Earnings Beat on Used Margins and Financing Growth
• Positive Sentiment: Profitability metrics improved. Used retail gross profit per unit increased 20% sequentially to $339 higher, aftersales gross margin expanded to 59.2%, and adjusted selling, general and administrative costs improved as a percentage of gross profit. Financing operations generated a record $37 million of income on $884 million of originations. Lithia & Driveway Second-Quarter Results
• Positive Sentiment: Shareholder returns were increased. Lithia raised its quarterly dividend 22.8% to $0.70 per share and repurchased $242 million of stock during the quarter, equal to 3.7% of shares outstanding. These actions likely reinforced investor enthusiasm and contributed to the stock reaching a record high. Lithia Motors Shares Rally on Record Revenue and Dividend Hike
• Neutral Sentiment: Brokerages collectively maintain a “Moderate Buy” recommendation, indicating generally favorable sentiment but not an overwhelming consensus. Consensus Recommendation
• Negative Sentiment: Valuation and analyst caution are potential headwinds. Wells Fargo raised its price target to $395 but retained an “equal weight” rating, implying limited upside at recent levels. A separate analysis suggested LAD could be approximately 15% above fair value following the earnings-driven rally. Wells Fargo Price Target Update Lithia Motors Fair Value Analysis

Lithia Motors declared that its Board of Directors has initiated a share repurchase plan on Tuesday, May 26th that allows the company to buyback $500.00 million in outstanding shares. This buyback authorization allows the company to purchase up to 7.9% of its shares through open market purchases. Shares buyback plans are typically an indication that the company’s board of directors believes its stock is undervalued.

Insider Buying and Selling at Lithia Motors

In other Lithia Motors news, Director Richard J. Bailey, Jr. sold 297 shares of the business’s stock in a transaction dated Tuesday, May 26th. The stock was sold at an average price of $280.57, for a total value 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 position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, Director Shauna Mcintyre sold 165 shares of the firm’s stock in a transaction dated Wednesday, June 10th. The shares were sold at an average price of $305.64, for a total transaction of $50,430.60. Following the sale, the director directly owned 1,681 shares in the company, valued at approximately $513,780.84. The trade was a 8.94% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold 782 shares of company stock worth $229,572 over the last ninety days. 1.08% of the stock is currently owned by insiders.

Institutional Investors Weigh In On Lithia Motors

Large investors have recently added to or reduced their stakes in the stock. Dimensional Fund Advisors LP boosted its stake in shares of Lithia Motors by 3.2% in the 1st quarter. Dimensional Fund Advisors LP now owns 1,389,870 shares of the company’s stock worth $347,074,000 after buying an additional 43,087 shares during the last quarter. River Road Asset Management LLC increased its position in Lithia Motors by 33.6% during the fourth quarter. River Road Asset Management LLC now owns 742,677 shares of the company’s stock valued at $246,814,000 after acquiring an additional 186,628 shares during the last quarter. Canada Pension Plan Investment Board lifted its holdings in Lithia Motors by 5.9% in the second quarter. Canada Pension Plan Investment Board now owns 612,377 shares of the company’s stock valued at $206,873,000 after acquiring an additional 33,966 shares during the period. Hotchkis & Wiley Capital Management LLC boosted its position in Lithia Motors by 3.6% in the third quarter. Hotchkis & Wiley Capital Management LLC now owns 426,120 shares of the company’s stock worth $134,654,000 after purchasing an additional 14,781 shares during the last quarter. Finally, Norges Bank purchased a new position in Lithia Motors in the fourth quarter worth about $125,214,000.

Lithia Motors Company Profile

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.