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Lithia Motors (LAD) Dips More Than Broader Markets: What You Should Know

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Zacks Equity Research
·3 min read
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In the latest trading session, Lithia Motors (LAD) closed at $243.11, marking a -1.23% move from the previous day. This change lagged the S&P 500's 0.81% loss on the day. Meanwhile, the Dow lost 0.56%, and the Nasdaq, a tech-heavy index, lost 1.27%.

Heading into today, shares of the auto dealership chain had gained 1.5% over the past month, lagging the Retail-Wholesale sector's gain of 7.71% and the S&P 500's gain of 5.06% in that time.

Investors will be hoping for strength from LAD as it approaches its next earnings release. In that report, analysts expect LAD to post earnings of $4.05 per share. This would mark year-over-year growth of 19.47%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.48 billion, up 4.53% from the year-ago period.

LAD's full-year Zacks Consensus Estimates are calling for earnings of $13.82 per share and revenue of $12.53 billion. These results would represent year-over-year changes of +17.52% and -1.13%, respectively.

It is also important to note the recent changes to analyst estimates for LAD. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 5.9% higher. LAD is currently sporting a Zacks Rank of #1 (Strong Buy).

Digging into valuation, LAD currently has a Forward P/E ratio of 17.81. Its industry sports an average Forward P/E of 12.07, so we one might conclude that LAD is trading at a premium comparatively.

The Automotive - Retail and Whole Sales industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 1, which puts it in the top 1% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow LAD in the coming trading sessions, be sure to utilize Zacks.com.


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