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Penske Automotive (PAG) Stock Sinks As Market Gains: What You Should Know

·3 min read

Penske Automotive (PAG) closed the most recent trading day at $116.72, moving -1.01% from the previous trading session. This change lagged the S&P 500's 0.3% gain on the day. Meanwhile, the Dow gained 0.46%, and the Nasdaq, a tech-heavy index, lost 0.02%.

Prior to today's trading, shares of the auto dealership chain had gained 0.58% over the past month. This has outpaced the Retail-Wholesale sector's loss of 1.66% and the S&P 500's loss of 4.13% in that time.

Wall Street will be looking for positivity from Penske Automotive as it approaches its next earnings report date. In that report, analysts expect Penske Automotive to post earnings of $4.40 per share. This would mark a year-over-year decline of 1.35%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7 billion, up 7.81% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $18.16 per share and revenue of $27.73 billion, which would represent changes of +18.85% and +8.51%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Penske Automotive. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.83% higher. Penske Automotive is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Penske Automotive is currently trading at a Forward P/E ratio of 6.49. For comparison, its industry has an average Forward P/E of 5.55, which means Penske Automotive is trading at a premium to the group.

Investors should also note that PAG has a PEG ratio of 1.02 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Automotive - Retail and Whole Sales was holding an average PEG ratio of 0.59 at yesterday's closing price.

The Automotive - Retail and Whole Sales industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 76, putting it in the top 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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