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LAD: Luxury Acquisitions And Buybacks Will Drive Strong Future Upside 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 21 Dec 2025

Fair value Increased 0.17%
Previous
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AnalystConsensusTarget's Fair Value
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1Y
-4.5%
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-0.8%

Analysts have nudged their price target on Lithia Motors slightly higher to approximately $395 per share from about $394 previously, citing steady assumptions for discount rates, long term revenue growth, profit margins, and future valuation multiples that collectively support a marginally stronger fair value outlook.

What's in the News

  • Lithia & Driveway acquired Porsche Beverly Hills and Audi Santa Monica, adding an estimated $450 million in annualized revenue and expanding its presence in global luxury auto retail (Key Developments)
  • The new luxury stores contribute to a total of $2.1 billion in expected annualized revenue acquired year to date, reinforcing Lithia's acquisition driven growth strategy (Key Developments)
  • The acquisitions were funded using existing on balance sheet capacity, signaling sufficient liquidity to pursue further expansion without new external financing (Key Developments)
  • Between July 1, 2025 and October 22, 2025, Lithia repurchased 1,377,225 shares for $428.11 million, equal to 5.36 percent of shares, under its ongoing buyback program (Key Developments)
  • Since the March 3, 2016 buyback authorization, the company has cumulatively repurchased 10,444,916 shares, representing 39.42 percent of shares outstanding for $2,261.98 million (Key Developments)

Valuation Changes

  • The fair value estimate per share has risen slightly to approximately $394.79 from about $394.13. This reflects a marginally higher intrinsic value assessment.
  • The discount rate remains unchanged at 12.5 percent, indicating a consistent view of Lithia Motors risk profile and cost of capital.
  • The revenue growth assumption is effectively flat at around 4.66 percent, with only an immaterial rounding adjustment in the updated model.
  • The net profit margin assumption is essentially unchanged at roughly 2.72 percent, with only a negligible upward adjustment in the revised forecast.
  • The future P/E multiple has risen slightly to about 9.12x from roughly 9.11x, signaling a modestly higher expected valuation on forward earnings.

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Disclaimer

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