Penske Automotive Group (PAG)
NYSE:PAG
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Penske Automotive Group
(NYSE:PAG)
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Rating:63Neutral
Price Target:
$150.00
▲(1.28% Upside)
Action:DowngradedDate:02/28/26
The score is driven primarily by solid but cooling financial performance (margin normalization, softer cash conversion, and meaningful leverage). Valuation is a positive offset (moderate P/E and ~3.4% yield), and the earnings call supports a constructive but cautious 2026 outlook. Technicals are the main drag, with the stock trading below major moving averages and weak momentum readings.
Positive Factors
Scale & diversified revenue streams
Large, diversified revenue base across new/used vehicles, parts & service, F&I and commercial trucks provides structural resilience. Scale supports purchasing, service capacity and cross-selling, helping sustain revenue and margins through industry cycles over the next 2–6 months and beyond.
Negative Factors
Meaningful leverage
Elevated leverage limits balance-sheet flexibility during industry downturns and raises interest vulnerability. With sizable long-term and floorplan debt, adverse macro or credit conditions could constrain M&A, buybacks or dividend pacing and pressure liquidity if cash flow weakens.
Read all positive and negative factors
Positive Factors
Negative Factors
Scale & diversified revenue streams
Large, diversified revenue base across new/used vehicles, parts & service, F&I and commercial trucks provides structural resilience. Scale supports purchasing, service capacity and cross-selling, helping sustain revenue and margins through industry cycles over the next 2–6 months and beyond.
Read all positive factors
Penske Automotive Group (PAG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.74B
Dividend Yield3.14%
Average Volume (3M)345.50K
Price to Earnings (P/E)11.2
Beta (1Y)0.70
Revenue Growth2.25%
EPS Growth8.92%
CountryUS
Employees28,700
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)2.91
Shares Outstanding65,760,086
10 Day Avg. Volume391,696
30 Day Avg. Volume345,505
Financial Highlights & Ratios
PEG Ratio4.17
Price to Book (P/B)1.88
Price to Sales (P/S)0.33
P/FCF Ratio14.16
Enterprise Value/Market Cap1.91
Enterprise Value/Revenue0.60
Enterprise Value/Gross Profit3.67
Enterprise Value/Ebitda11.01
Forecast
1Y Price Target
$183.75Price Target Upside24.06% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)13.51
Revenue Forecast (FY)$31.80B
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:Feb 11, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call describes a fundamentally profitable and capital-return-focused company with strong full-year results (revenue $31B, net income $935M, EPS $14.13), robust cash flow, active M&A and shareholder distributions. Management acknowledged meaningful near-term headwinds — weaker premium and BEV sales, supply/mix pressures in used vehicles, freight recession impacts on truck and PTS results, and U.K. market softness — and quantified one-time adverse items in Q4. Operational actions (fleet resizing, cost reductions, portfolio divestitures, acquisitions in higher-return markets) and early signs of improvement in PTS utilization and Australian performance position the company to benefit if macro and freight conditions normalize. On balance, the positives (strong full-year profitability, cash generation, disciplined capital allocation, strategic acquisitions and fleet/right-sizing actions) outweigh the near-term challenges called out for Q4 and Q1, supporting a constructive outlook.Positive Updates
Strong Full-Year Financial Performance
Fiscal 2025 revenue of $31.0 billion; earnings before taxes of ~ $1.3 billion; net income of $935 million; diluted EPS of $14.13.
Negative Updates
Q4 Revenue and Unit Declines
Q4 revenue declined 4% YoY to $7.8 billion; automotive same-store units delivered declined 8% and same-store used units declined 4%.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Full-Year Financial Performance
Fiscal 2025 revenue of $31.0 billion; earnings before taxes of ~ $1.3 billion; net income of $935 million; diluted EPS of $14.13.
Read all positive updates
Company Guidance
Penske guided to a cautiously optimistic 2026 tone: management expects a recovery in the commercial truck market and a stronger U.S. macro backdrop aided by the “One Big Beautiful Bill” (bonus depreciation they estimate will add $120–$150M of cash flow annually), tax refunds, lower interest rates and GDP growth, while warning Q1 will face headwinds from prior-year tariff/BEV pull‑forwards and U.K. tax timing. Key metrics cited include 2025 results of 485,000 new/used vehicles and ~19,000 commercial trucks, $31.0B revenue, ~ $1.3B EBT, $935M net income and $14.13 EPS; Q4 revenue of $7.8B (‑4%), Q4 EBT $256M (adjusted $263M), Q4 net income $186M (adjusted $192M) and Q4 EPS $2.83 (adjusted $2.91); 2025 EBITDA $1.5B, cash flow from operations $1.0B and free cash flow $651M after $325M CapEx. Capital allocation/growth targets include acquisitions adding $1.6B of estimated annualized revenue, divestitures of ~$700M in revenue generating $200M proceeds (expect ~$140M more proceeds in 2026), $182M of share repurchases (1.2M shares, ~1.8% of float) with $247.5M remaining capacity, a dividend raised to $1.40 per share (21st consecutive increase) with a 37.4% payout ratio and ~3.4% forward yield, non-vehicle long-term debt of $2.17B, floorplan of $4.1B, total inventory $4.8B (49-day new and 49-day used supply; new: premium 52 days/volume 34 days; used: U.S. 34 days/U.K. 66 days), cash $65M and liquidity $1.6B, and a target to keep leverage well under 2.0 (current ~1.5).Penske Automotive Group Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
63
Positive
Cash Flow
58
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 31.81B | 30.46B | 29.53B | 27.81B | 25.55B |
| Gross Profit | 5.22B | 5.01B | 4.93B | 4.84B | 4.44B |
| EBITDA | 1.52B | 1.68B | 1.79B | 2.11B | 1.82B |
| Net Income | 935.40M | 918.90M | 1.05B | 1.38B | 1.19B |
Balance Sheet | |||||
| Total Assets | 18.38B | 16.72B | 15.67B | 14.11B | 13.46B |
| Cash, Cash Equivalents and Short-Term Investments | 64.70M | 72.40M | 96.40M | 106.50M | 100.70M |
| Total Debt | 8.82B | 8.27B | 7.74B | 6.95B | 6.40B |
| Total Liabilities | 12.80B | 11.49B | 10.92B | 9.94B | 9.37B |
| Stockholders Equity | 5.56B | 5.21B | 4.73B | 4.15B | 4.07B |
Cash Flow | |||||
| Free Cash Flow | 740.20M | 811.10M | 718.30M | 1.18B | 1.04B |
| Operating Cash Flow | 1.06B | 1.18B | 1.09B | 1.46B | 1.29B |
| Investing Cash Flow | -175.00M | -1.04B | -572.30M | -641.70M | -623.10M |
| Financing Cash Flow | -915.20M | -164.70M | -531.10M | -798.00M | -615.50M |
Penske Automotive Group Technical Analysis
Negative
148.11
Price Trends
157.73
Negative
159.12
Negative
165.40
Negative
Market Momentum
-4.22
Positive
43.22
Neutral
64.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PAG, the sentiment is Negative. The current price of 148.11 is below the 20-day moving average (MA) of 150.53, below the 50-day MA of 157.73, and below the 200-day MA of 165.40, indicating a bearish trend. The MACD of -4.22 indicates Positive momentum. The RSI at 43.22 is Neutral, neither overbought nor oversold. The STOCH value of 64.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PAG.
Penske Automotive Group Risk Analysis
Penske Automotive Group disclosed 24 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 |
|---|---|---|---|---|---|---|---|
63 Neutral | $9.74B | 11.20 | 16.04% | 3.14% | 2.25% | 8.92% | |
62 Neutral | $3.74B | 9.17 | 9.29% | ― | 8.07% | 60.95% | |
62 Neutral | $3.90B | 15.78 | 10.85% | 0.49% | 19.45% | -24.27% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $5.94B | 10.30 | 12.08% | 0.64% | 8.56% | 17.84% | |
60 Neutral | $5.94B | 23.09 | 7.39% | ― | 0.12% | 2.78% | |
58 Neutral | $6.72B | 12.12 | 26.70% | ― | 6.06% | -1.71% |
* Consumer Cyclical Sector Average
PAG
Penske Automotive Group
148.89
9.05
6.47%
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Penske Automotive Group Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresM&A Transactions
Penske Automotive boosts dividend amid mixed 2025 results
Neutral
Feb 11, 2026
On February 11, 2026, Penske Automotive Group reported that fourth-quarter 2025 revenue declined to $7.8 billion from $8.1 billion a year earlier, with net income attributable to common stockholders falling to $186.1 million and EPS to $2.83, refl...
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.