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Lithia's (LAD) Buyout Spree Continues With Nissan Dealership

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Lithia Motors LAD announced the acquisition of Avondale Nissan dealership in Phoenix in a bid to bolster its offerings in the second largest market in the Southwest region. The transaction is expected to add $75 million in Lithia’s annualized revenues. The deal was funded through the capital raised in concurrent equity and debt offerings in late 2020.

Lithia is one of the leading automotive retailers of new and used vehicles, along with related services in the United States. It offers tailored services complemented through its nationwide network. The auto retailer continuously strives to make acquisitions for increasing market share and catering to customer requirements in a better way. 

The spree of buyouts like John Eagle dealerships, Keyes Automotive dealerships and others brought the company's network expansion to more than $3.5 billion in revenues in 2020. Notably, Lithia has additional $7-$10 billion of potential acquisitions and the firm expects network expansion in 2021 to exceed the record levels attained in 2020. 

In February 2021, the company announced the acquisition of two dealerships in Florida from Fields Auto Group, which is likely to add $200 million to its annualized revenues. Early this month, Lithia expanded footprint in the Southeast region with the buyout of Fink Automotive Group. The deal is anticipated to add $430 million in annualized revenues and boost the auto retailer’s revenues in the Southeast region to more than $1 billion. 

Lithia had earlier announced a five-year plan to yield $50 billion in revenues and $50 in earnings per share. Since the plan’s roll-out, the retailer has achieved more than $4.1 billion in total expected annualized revenues.

Lithia Motors currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the same industry include Americas CarMart, Inc. CRMT, AutoNation AN and Penske Automotive PAG, each carrying a Zacks Rack #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Penske Automotive Group, Inc. (PAG) : Free Stock Analysis Report
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Lithia Motors, Inc. (LAD) : Free Stock Analysis Report
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