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LAD: Luxury Acquisitions Will Drive Higher Long-Term Revenue Potential

Analysts Lift Lithia Motors Price Target as Buybacks and Expansions Drive Improved Margins

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LAD
AnalystConsensusTarget
Not Invested
Published 27 Aug 2024

Update shared on 07 Dec 2025

Fair value Increased 1.03%
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Analysts have raised their price target on Lithia Motors to approximately 394 dollars per share from about 390 dollars, reflecting slightly higher long term revenue growth expectations that more than offset a modestly lower projected profit margin.

What's in the News

  • Lithia & Driveway acquired Porsche Beverly Hills and Audi Santa Monica, adding an estimated 450 million dollars in annualized revenue and bringing year-to-date expected annualized revenue acquired to 2.1 billion dollars (Key Developments)
  • The new luxury stores in Beverly Hills and Santa Monica are expected to be among the highest volume locations globally for their respective brands and were funded using existing on-balance-sheet capacity (Key Developments)
  • Lithia & Driveway achieved position 124 on the Fortune 500 and 434 on the Fortune Global 500, while retaining the number one ranking in the Automotive Retail category for the second consecutive year (Key Developments)
  • Recent acquisitions in Palm Beach, including Acura, Hyundai, and Genesis dealerships, expand Lithia & Driveway's luxury and import mix in the high-margin Southeast region, with potential to become some of the highest volume stores in the United States (Key Developments)

Valuation Changes

  • Fair Value Estimate increased slightly from about 390 dollars per share to roughly 394 dollars per share, reflecting modestly more optimistic long-term assumptions.
  • The Discount Rate remains unchanged at 12.5 percent, indicating a consistent view of Lithia Motors’ risk profile.
  • Revenue Growth increased moderately from approximately 4.17 percent to about 4.66 percent annually, signaling higher expected top-line expansion.
  • Net Profit Margin edged down slightly from roughly 2.75 percent to about 2.72 percent, suggesting marginally lower long-term profitability assumptions.
  • Future P/E rose slightly from about 9.0 times to roughly 9.1 times, implying a small uptick in the valuation multiple applied to projected earnings.

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