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Investing.com - Guggenheim raised its price target on Lithia Motors (NYSE:LAD) to $383.00 from $375.00 on Thursday, while maintaining a Buy rating on the automotive retailer’s stock. As a prominent player in the Specialty Retail industry, Lithia currently trades at a P/E ratio of 10.4x, with analyst targets ranging from $310 to $500 per share.
The price target increase reflects Guggenheim’s updated earnings estimates for Lithia Motors, though the firm kept its valuation multiple unchanged at approximately 11.0 times expected 2025 earnings per share of $34.81. This aligns with recent positive momentum, as InvestingPro data shows three analysts have revised their earnings estimates upward for the upcoming period.
Guggenheim noted that its valuation multiple remains below the last-cycle average of approximately 11.5 times earnings, which the firm considers appropriate in the current environment.
The research firm explained that its valuation approach balances potential tariff-related risks against what it describes as "cyclically depressed earnings forecasts" for the company.
Despite the modest price target increase, Guggenheim maintained its positive outlook on Lithia Motors, as reflected in its continued Buy rating on the automotive retailer’s shares.
In other recent news, Lithia Motors has reported preliminary second-quarter earnings per share ranging from $9.70 to $10.00, marking a 23% to 27% increase compared to the previous year. This earnings performance exceeded expectations from analysts at Citi and Benchmark, who had projected lower figures. Revenue for the quarter is anticipated to be between $9.4 billion and $9.6 billion, slightly below some estimates but still showing growth from last year. Additionally, Lithia Motors has been active in share repurchases, reducing its share count by 1.5% during the quarter.
In other developments, Lithia Motors has sold its 51% stake in a joint venture to Pinewood.AI for $150 million, which will be settled through new share issuance. This transaction allows Pinewood.AI to consolidate its revenue and streamline operations in the North American market. A five-year contract has also been established for the deployment of Pinewood’s Automotive Intelligence™ platform across Lithia’s dealerships in the U.S. and Canada. This agreement is expected to generate significant annual revenue for Pinewood.AI, with projections reaching up to $60 million by 2028.
Analysts from firms such as Benchmark and Citi have reiterated their Buy ratings for Lithia Motors, reflecting confidence in the company’s financial performance and strategic moves. Lithia Motors is scheduled to release its complete second-quarter financial results on July 29, 2025.
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