Penske Automotive Group: Strong Financial Position and Growth Opportunities Reinforce Buy RatingWe made some modest changes at the unit level (volumes, ASPs, GPUs), resulting in only minor estimate changes for the remainder of FY25 and FY26. Our Take. Despite a mixed quarter, we overweight the positives. PAG’s diversified model remains a strength, with solid cost discipline driving profitability gains. Auto retail volumes were negative but largely self-inflicted due to portfolio optimization (Sytner), and this was offset by improving GPUs. New tailwinds in the truck businesses add further upside. Overall, PAG combines low leverage, high liquidity, and strong cash flow with disciplined capital allocation, a growing dividend, active buybacks, and a healthy M&A pipeline. U.S. Strength Offsets Soft U.K. The sales miss makes this a “mixed” quarter, though U.S. performance was solid, aided by tariff pre-buying.