Analysts Have Made A Financial Statement On Penske Automotive Group, Inc.'s (NYSE:PAG) Third-Quarter Report

Penske Automotive Group, Inc. (NYSE:PAG) last week reported its latest third-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Penske Automotive Group reported in line with analyst predictions, delivering revenues of US$7.6b and statutory earnings per share of US$3.39, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Penske Automotive Group

After the latest results, the ten analysts covering Penske Automotive Group are now predicting revenues of US$31.6b in 2025. If met, this would reflect an okay 5.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 7.6% to US$14.07. Before this earnings report, the analysts had been forecasting revenues of US$31.6b and earnings per share (EPS) of US$14.02 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of US$170, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Penske Automotive Group, with the most bullish analyst valuing it at US$188 and the most bearish at US$150 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Penske Automotive Group is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Penske Automotive Group's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.3% growth on an annualised basis. This is compared to a historical growth rate of 7.9% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.8% annually. So it's pretty clear that, while Penske Automotive Group's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$170, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Penske Automotive Group analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Penske Automotive Group (1 is a bit concerning!) that you need to be mindful of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.