Auto retailer Lithia & Driveway's Q3 results beat on demand for used vehicles

Overview

• US automotive retailer's Q3 revenue rose 3% yr/yr, beating analyst expectations

• Adjusted diluted EPS for Q3 increased 9%, beating analyst expectations

• Company repurchased $85 mln in shares and raised quarterly dividend by 7%

Outlook

• Company expects $250 mln in annualized revenue from recent Memphis store acquisitions

• Company has acquired $1.17 bln in expected annualized revenues year to date

• Company says strategy and priorities remain unchanged, focusing on network growth and capital discipline

Result Drivers

• USED VEHICLE PROFITABILITY - Co said used vehicle gross profit per unit rose 11% yr/yr

• AFTERSALES MARGINS - Aftersales gross profit and margin improved on a same-store basis

• FINANCING OPERATIONS - Co said financing operations income grew 69% yr/yr, supported by record originations

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 12 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the auto vehicles, parts & service retailers peer group is "buy"

• Wall Street's median 12-month price target for Lithia Motors Inc is $409.00, about 36.5% above its October 20 closing price of $299.53

• The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 8 three months ago

Reuters Recommended Reads

• Oct 20 - GM shares sink as automaker signals rising cost pressures

• Oct 20 - General Motors' Q3 revenue, adj EPS beat on North America performance

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)