Analyst John Murphy from Bank of America Securities maintained a Buy rating on Penske Automotive Group (PAG – Research Report) and keeping the price target at $195.00.
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John Murphy has given his Buy rating due to a combination of factors. Penske Automotive Group reported a strong fourth-quarter performance with adjusted earnings per share exceeding expectations, driven largely by robust pricing in both new and used vehicles, leading to higher retail revenue and improved SG&A efficiency.
Penske’s same-store sales for new vehicles showed significant year-over-year growth, outperforming initial estimates, while used vehicle sales also surpassed expectations despite a forecasted decline. The company’s total gross margin was slightly above expectations, with notable strength in parts and services gross margins. Furthermore, Penske’s strategic capital allocation and diversification efforts, supported by strong free cash flow and low adjusted net leverage, provide a solid foundation for future growth, contributing to the Buy rating.
Murphy covers the Consumer Cyclical sector, focusing on stocks such as Tesla, Aptiv, and Ford Motor. According to TipRanks, Murphy has an average return of 7.7% and a 53.85% success rate on recommended stocks.