Penske Automotive Group, Inc. (NYSE:PAG) Just Released Its First-Quarter Earnings: Here's What Analysts Think

The first-quarter results for Penske Automotive Group, Inc. (NYSE:PAG) were released last week, making it a good time to revisit its performance. It looks like the results were a bit of a negative overall. While revenues of US$7.4b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 4.2% to hit US$3.21 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Penske Automotive Group

Taking into account the latest results, the most recent consensus for Penske Automotive Group from nine analysts is for revenues of US$30.5b in 2024. If met, it would imply a modest 2.8% increase on its revenue over the past 12 months. Statutory earnings per share are expected to shrink 6.6% to US$13.54 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$30.5b and earnings per share (EPS) of US$14.29 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$154, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Penske Automotive Group analyst has a price target of US$185 per share, while the most pessimistic values it at US$115. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Penske Automotive Group's past performance and to peers in the same industry. We would highlight that Penske Automotive Group's revenue growth is expected to slow, with the forecast 3.7% annualised growth rate until the end of 2024 being well below the historical 7.3% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.0% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Penske Automotive Group.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Penske Automotive Group's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Penske Automotive Group going out to 2026, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Penske Automotive Group that you should be aware of.

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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.