Penske Automotive (PAG)
NYSE:PAG
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Penske Automotive Group
(NYSE:PAG)
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Rating:69Neutral
Price Target:
$182.00
▲(12.82% Upside)
Action:Reiterated
Date:05/15/26
The score is driven primarily by fundamental pressure (margin compression, high leverage, and weakening cash flow), partly offset by attractive valuation (low P/E and solid yield) and a supportive technical backdrop (price above key moving averages with positive MACD). The latest earnings call adds a modest positive tilt on service strength and expected H2 truck recovery, though near-term volume and margin headwinds remain.
Positive Factors
Diversified integrated business model
Penske’s integrated model—new and used retail, parts & service, F&I, commercial trucks and an equity stake in PTS—creates multiple, partially countercyclical revenue streams. That structural diversification stabilizes cash flow and reduces reliance on new-vehicle volumes over months.
Negative Factors
Margin compression and earnings downshift
Margins and reported earnings have materially compressed versus the prior cycle, reducing profitability cushions. Persistent margin pressure and higher SG&A as a share of gross profit limit operating leverage upside and leave less room to absorb slower volumes or cost inflation.
Read all positive and negative factors
Positive Factors
Negative Factors
Diversified integrated business model
Penske’s integrated model—new and used retail, parts & service, F&I, commercial trucks and an equity stake in PTS—creates multiple, partially countercyclical revenue streams. That structural diversification stabilizes cash flow and reduces reliance on new-vehicle volumes over months.
Read all positive factors
Penske Automotive Group (PAG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.06B
Dividend Yield3.14%
Average Volume (3M)300.36K
Price to Earnings (P/E)11.9
Beta (1Y)0.66
Revenue Growth1.24%
EPS Growth-5.59%
CountryUS
Employees28,700
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)13.40
Shares Outstanding65,749,250
10 Day Avg. Volume271,733
30 Day Avg. Volume300,357
Financial Highlights & Ratios
PEG Ratio-4.51
Price to Book (P/B)1.88
Price to Sales (P/S)0.33
P/FCF Ratio14.16
Enterprise Value/Market Cap1.83
Enterprise Value/Revenue0.63
Enterprise Value/Gross Profit3.85
Enterprise Value/Ebitda12.69
Forecast
1Y Price Target
$183.25Price Target Upside13.59% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)13.45
Revenue Forecast (FY)$32.07B
Penske Automotive Group Business Overview & Revenue Model
Company Description
Penske Automotive Group, Inc., a diversified transportation services company, operates automotive and commercial truck dealerships. The company operates through four segments: Retail Automotive, Retail Commercial Truck, Other, and Non-Automotive I...
How the Company Makes Money
PAG primarily earns revenue from multiple integrated streams tied to vehicle retailing and ongoing vehicle ownership. (1) New vehicle sales: PAG sells new vehicles through franchised dealerships; revenue is recognized from the retail sale of vehic...
Penske Automotive Group Earnings Call Summary
Earnings Call Date:Apr 29, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 29, 2026
Earnings Call Sentiment Positive
The call outlines a generally constructive operational picture with meaningful strengths: solid revenue (~$7.9B), positive adjusted profitability, record service & parts performance, international revenue growth (+6%), PTS equity income growth (+24%), strategic dealership acquisitions expected to add significant annualized revenue, continued capital returns and a healthy balance sheet (leverage ~1.8x, liquidity $1.2B). Offsetting these positives are notable near-term headwinds: same-store new unit declines (-5%), a large drop in BEV sales (-61%), commercial truck order weakness that compressed truck volumes (Premier Truck new sales -26%), lower gain on sale from PTS (down $26M), and margin pressure (gross profit -1.7% with SG&A rising to 74.3% of gross profit). Management’s commentary emphasizes diversification, fleet and portfolio optimization, and expectation of recovery in truck orders in H2 2026. On balance, the highlights — recurring service growth, international momentum, PTS operational improvement, disciplined capital allocation and strong liquidity — outweigh the current lowlights, which are driven largely by short-term market, regulatory and timing factors.Positive Updates
Profitability and Adjusted Results
Reported earnings before taxes of $324 million, net income of $235 million and GAAP EPS of $3.56. Excluding a $60 million gain on sale and $13 million of disposals/other charges, adjusted EBT was $276 million, adjusted net income was $201 million and adjusted EPS was $3.05.
Negative Updates
Decline in Same-Store New Retail Units
Same-store retail automotive new units declined 5% year-over-year (used units increased only 1%), and only 25% of new units sold at MSRP vs 29% in Q1 last year, signaling tougher retail pricing/volume dynamics.
Read all updates
Q1-2026 Updates
Positive
Negative
Profitability and Adjusted Results
Reported earnings before taxes of $324 million, net income of $235 million and GAAP EPS of $3.56. Excluding a $60 million gain on sale and $13 million of disposals/other charges, adjusted EBT was $276 million, adjusted net income was $201 million and adjusted EPS was $3.05.
Read all positive updates
Company Guidance
Management reiterated that despite a tough comparison period, Q1 was solid: PAG delivered over 123,000 new and used vehicles (and nearly 3,600 commercial trucks), generated ≈$7.9 billion of revenue, reported EBT of $324 million and net income of $235 million (EPS $3.56), with adjusted EBT $276 million, adjusted net income $201 million and adjusted EPS $3.05 (including a $60M gain on a dealership sale partly offset by $13M of disposals/charges). Looking ahead, management said the commercial truck recovery is underway—Class 8 orders were up 91% and industry backlog rose 33% to 175,000 units—and they expect increased new truck orders and deliveries to benefit the business in the second half of 2026; PTS trends include Q1 operating revenue $2.5B (‑4%), lease +2% / rental ‑17% / logistics ‑3%, PTS sold 9,319 units, ended the quarter with a 387,500‑unit fleet (vs. 435,000 prior) and PTS equity income rose 24% to $41M. On capital allocation and the balance sheet they emphasized discipline: Q1 cash flow from operations $215M, EBITDA $397M, capex $63M, repurchased 170,000 shares for $26M (≈$221M remaining authorization), raised the quarterly dividend to $1.40 (≈3.4% yield, LTM payout 39%), cash $84M and liquidity $1.2B, non‑vehicle long‑term debt $2.6B (leverage 1.8x), floor plan $4.1B, vehicle equity $425M, total inventory $4.9B (new 44‑day supply; used 39‑day), and noted a 25 bp rate move would change interest expense by ~ $15M.Penske Automotive Group Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
63
Positive
Cash Flow
57
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 32.07B | 31.81B | 31.86B | 30.92B | 27.81B | 25.55B |
| Gross Profit | 5.25B | 5.22B | 5.22B | 5.15B | 4.84B | 4.44B |
| EBITDA | 1.59B | 1.70B | 1.73B | 1.85B | 2.11B | 1.82B |
| Net Income | 925.60M | 935.40M | 968.90M | 1.11B | 1.38B | 1.19B |
Balance Sheet | ||||||
| Total Assets | 18.32B | 18.38B | 16.72B | 15.67B | 14.11B | 13.46B |
| Cash, Cash Equivalents and Short-Term Investments | 83.70M | 64.70M | 72.40M | 96.40M | 106.50M | 100.70M |
| Total Debt | 9.21B | 8.82B | 8.27B | 7.74B | 6.95B | 6.40B |
| Total Liabilities | 12.64B | 12.80B | 11.49B | 10.92B | 9.94B | 9.37B |
| Stockholders Equity | 5.68B | 5.56B | 5.21B | 4.73B | 4.15B | 4.07B |
Cash Flow | ||||||
| Free Cash Flow | 464.70M | 740.20M | 811.10M | 718.30M | 1.18B | 1.04B |
| Operating Cash Flow | 775.30M | 1.06B | 1.18B | 1.09B | 1.46B | 1.29B |
| Investing Cash Flow | -812.90M | -175.00M | -1.04B | -572.30M | -641.70M | -623.10M |
| Financing Cash Flow | -13.10M | -915.20M | -164.70M | -531.10M | -798.00M | -615.50M |
Penske Automotive Group Technical Analysis
Positive
161.32
Price Trends
159.32
Positive
159.40
Positive
163.49
Positive
Market Momentum
1.32
Positive
55.13
Neutral
78.76
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PAG, the sentiment is Positive. The current price of 161.32 is below the 20-day moving average (MA) of 166.58, above the 50-day MA of 159.32, and below the 200-day MA of 163.49, indicating a bullish trend. The MACD of 1.32 indicates Positive momentum. The RSI at 55.13 is Neutral, neither overbought nor oversold. The STOCH value of 78.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PAG.
Penske Automotive Group Risk Analysis
Penske Automotive Group disclosed 27 risk factors in its most recent earnings report. Penske Automotive Group reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Penske Automotive Group Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $11.06B | 11.90 | 16.41% | 3.14% | 1.24% | -5.59% | |
66 Neutral | $6.74B | 9.58 | 10.61% | 0.64% | 2.37% | -10.19% | |
63 Neutral | $3.63B | 6.51 | 14.15% | ― | 4.83% | 33.96% | |
63 Neutral | $6.48B | 9.59 | 28.44% | ― | 1.94% | 9.88% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
59 Neutral | $3.88B | 11.64 | 11.04% | 0.49% | 7.17% | -26.51% | |
54 Neutral | $6.23B | 26.57 | 4.05% | ― | -1.64% | -50.32% |
* Consumer Cyclical Sector Average
PAG
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Penske Automotive Group Corporate Events
Executive/Board ChangesDividendsShareholder Meetings
Penske Automotive Shareholders Approve Proposals, Boost Dividend
Positive
May 14, 2026
Penske Automotive Group, Inc., a global transportation services and automotive and commercial truck retailing company, operates extensive dealership and distribution networks across North America, Europe, and Asia-Pacific. The company also has a s...
Business Operations and StrategyStock BuybackFinancial DisclosuresM&A Transactions
Penske Automotive Q1 Earnings Decline Amid Ongoing Acquisitions
Negative
Apr 29, 2026
For the first quarter ended March 31, 2026, Penske Automotive Group reported revenue of $7.9 billion, slightly below the $8.0 billion recorded a year earlier, with net income attributable to common stockholders declining to $234.5 million from $25...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.