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Penske (PAG) Warming Up to Q3 Earnings: What to Expect?

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Penske Automotive Group PAG is slated to release third-quarter 2021 results on Oct 27. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $3.53 and $6.46 billion, respectively.

The auto retailer delivered better-than-anticipated results in the last reported quarter on higher-than-expected gross profit across all segments.

Over the preceding four quarters, the company topped estimates on all occasions, the average surprise being 33.85%. This is depicted in the graph below:

Penske Automotive Group, Inc. Price and EPS Surprise

Penske Automotive Group, Inc. Price and EPS Surprise
Penske Automotive Group, Inc. Price and EPS Surprise

Penske Automotive Group, Inc. price-eps-surprise | Penske Automotive Group, Inc. Quote

Trend in Estimate Revisions

The Zacks Consensus Estimate for Penske’s third-quarter earnings per share has been revised upward by 3 cents in the past seven days. Moreover, it compares favorably with the year-ago quarter’s earnings of $2.87 per share, indicating year-on-year growth of 23%. Further, the Zacks Consensus Estimate for quarterly revenues suggests a year-over-year jump of 8.21%.

Earnings Whispers

Our proven model predicts an earnings beat for Penske this time around. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of an earnings beat. This has been elaborated below.

Earnings ESP: Penske has an Earnings ESP of +6.64%. This is because the Most Accurate Estimate comes in 23 cents higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Penske currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors at Play

Robust volume and product margins, sustained recovery of the U.K. market — Penske’s second largest market — and the expanding Class 8 commercial truck market are all likely to have buoyed its third-quarter performance. In fact, the company’s quarterly results are likely to reflect gains from strong contributions from the Retail Automotive and Retail Commercial Truck segments.

Markedly, for the quarter under review, the Zacks Consensus Estimate for revenues from the Retail Automotive segment, which accounts for bulk of Penske’s overall top line, is pegged at $5,613 million, indicating a rise from the $5,258 million recorded in the year-ago quarter. Also, the profit metric for the segment is pinned at $969 million, calling for a surge from the $850 million reported in prior-year period.

For the September-end quarter, the consensus mark for revenues in the Retail Commercial Truck segment stands at $666 million, suggesting growth of $591 million from the year-ago level. In addition, the gross profit metric for the segment is pinned at $106 million, calling for an increase from the year-earlier level of $73 million.

The consensus mark for revenues in the Commercial Vehicles Australia/Power Systems and Other for the quarter under discussion is pegged at $135 million, suggesting a jump from the $123 million recorded in third-quarter 2020.

Apart from this, Penske's diversified business model is anticipated to have aided the company’s performance during the quarter under review amid the ongoing global chip shortage grappling the auto sector.

Other Stocks With Favorable Combinations

Along with Penske, here are a few other stocks lined up to release third-quarter results soon. Encouragingly, our model predicts earnings beats for these stocks as well:

General Motors GM has an Earnings ESP of +5.48% and currently carries a Zacks Rank #3. The company is set to report third-quarter 2021 earnings on Oct 27.

Sonic Automotive SAH has an Earnings ESP of +5.51% and holds a Zacks Rank of 2, at present. The company is scheduled to release quarterly figures on Oct 28.

Group 1 Automotive GPI has an Earnings ESP of +1.52% and carries a Zacks Rank #2, currently. The company’s third-quarter 2021 results are scheduled to be out on Oct 28.


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

General Motors Company (GM) : Free Stock Analysis Report

Group 1 Automotive, Inc. (GPI) : Free Stock Analysis Report

Sonic Automotive, Inc. (SAH) : Free Stock Analysis Report

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