Analyst Michael Albanese from Benchmark Co. reiterated a Buy rating on Penske Automotive Group (PAG – Research Report) and keeping the price target at $185.00.
Michael Albanese has given his Buy rating due to a combination of factors that highlight Penske Automotive Group’s resilience and strategic positioning in the market. Despite a slight miss in sales expectations, the company exceeded forecasts in adjusted EBITDA and EPS, showcasing its ability to maintain stability in a volatile market. The diversified business model of Penske, which spans various products, verticals, and geographies, provides a robust framework to withstand market fluctuations, including tariff uncertainties.
Penske’s strong balance sheet and disciplined capital allocation further enhance its resilience. The company’s healthy inventory levels support near-term pricing and gross profit unit strength, particularly in the face of potential tariff disruptions. Additionally, Penske’s fixed operations continue to perform well, with improvements in same-store parts and service sales and gross margins. The valuation of Penske’s stock, trading at approximately 8x forward AEBITDA and 10.5x forward EPS, supports the Buy rating with a price target of $185, reflecting confidence in the company’s future performance.
In another report released on April 23, Citi also initiated coverage with a Buy rating on the stock with a $185.00 price target.