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Penske Automotive Group
(NYSE:PAG)
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Rating:66Neutral
Price Target:
$238.00
▲(9.50% Upside)
Action:Reiterated
Date:07/31/26
Overall score reflects balanced fundamentals: financial performance is the main constraint due to margin compression, elevated leverage, and softer operating cash flow versus prior peaks. This is partially offset by strong technical uptrend (price well above key moving averages), a reasonable P/E with a supportive dividend yield, and a constructive earnings update featuring dividend growth, debt reduction, and improving Class 8 order tailwinds despite ongoing cost and rate sensitivity.
Positive Factors
Diversified multi-stream revenue model
Penske's mix of new/used vehicle retail, parts & service, F&I products and commercial truck operations creates durable revenue diversification. Aftersales and F&I are higher-margin, recurring streams that soften cyclicality in new-vehicle sales and support steadier profits and cash flow over months.
Negative Factors
Margin compression
Material narrowing of operating and net margins reflects persistent cost pressure, weaker pricing/mix and reduced operating leverage. Lower margins reduce the firm's buffer against cyclical downturns, constrain reinvestment capacity and limit sustainable free cash flow compared with prior peak profitability.
Read all positive and negative factors
Positive Factors
Negative Factors
Diversified multi-stream revenue model
Penske's mix of new/used vehicle retail, parts & service, F&I products and commercial truck operations creates durable revenue diversification. Aftersales and F&I are higher-margin, recurring streams that soften cyclicality in new-vehicle sales and support steadier profits and cash flow over months.
Read all positive factors
Penske Automotive Group (PAG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.27B
Dividend Yield2.54%
Average Volume (3M)395.78K
Price to Earnings (P/E)16.0
Beta (1Y)0.62
Revenue Growth4.13%
EPS Growth-5.43%
CountryUS
Employees27,700
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)13.58
Shares Outstanding65,662,870
10 Day Avg. Volume619,144
30 Day Avg. Volume395,776
Financial Highlights & Ratios
PEG Ratio-4.51
Price to Book (P/B)1.88
Price to Sales (P/S)0.33
P/FCF Ratio16.11
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$214.75Price Target Upside-1.20% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)13.43
Revenue Forecast (FY)$32.46B
Penske Automotive Group Business Overview & Revenue Model
Company Description
Penske Automotive Group, Inc. (PAG) is a comprehensive transportation services enterprise, primarily involved in running automotive and commercial truck dealerships. Its business activities are organized into four main segments: Retail Automotive,...
How the Company Makes Money
PAG generates revenue primarily through a multi-stream automotive retail and commercial truck distribution model. (1) Vehicle sales: The largest top-line driver is retailing new and used vehicles through franchised dealerships; revenue is recogniz...
Penske Automotive Group Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Positive
Across the three earnings calls managements reported meaningful operational progress, refreshed capital allocation and strong financial metrics: Safe Bulkers delivered large YoY uplift in EBITDA and EPS, tightened costs, improved fleet quality and raised dividends; Capital Power secured a major long-term ESA with Meta, increased its embedded EBITDA upside estimate and reaffirmed guidance while progressing capacity upgrades; Penske reported revenue and profit growth, truck-market recovery tailwinds, strong international orders and continued shareholder returns. Noted risks include fuel-transition exposure and orderbook limits at Safe Bulkers, market/regulatory and segment-specific headwinds at Capital Power, and margin/market challenges and interest-rate sensitivity at Penske. Overall, positive momentum and constructive strategic positioning outweigh the identified risks.Positive Updates
Safe Bulkers — Strong Q2 Financial Outperformance
Adjusted EBITDA of $50.3M in Q2 2026 vs $25.5M in Q2 2025 (≈+97.6%); adjusted EPS $0.28 vs $0.01 year-over-year; H1 2026 revenues $169M. Average TCE improved to $20,642 from $14,875 (+≈38.9%).
Negative Updates
Safe Bulkers — Fuel Transition and Orderbook Limitations
Only ~10% of dry bulk orderbook capacity able to use alternative fuels on delivery; dual-fuel orderbook in dry bulk remains small, implying exposure to future fuel transition costs and limited near-term bunker fuel flexibility.
Read all updates
Q2-2026 Updates
Positive
Negative
Safe Bulkers — Strong Q2 Financial Outperformance
Adjusted EBITDA of $50.3M in Q2 2026 vs $25.5M in Q2 2025 (≈+97.6%); adjusted EPS $0.28 vs $0.01 year-over-year; H1 2026 revenues $169M. Average TCE improved to $20,642 from $14,875 (+≈38.9%).
Read all positive updates
Company Guidance
Management delivered clear 2026 and near-term financial guidance and capital-allocation metrics across the calls: Capital Power reaffirmed 2026 adjusted EBITDA of $1.565–$1.765 billion, AFFO of $890 million–$1.01 billion and sustaining capex of $290–$330 million, raised its embedded annual adjusted EBITDA upside to ≈$1.25 billion (≈$400–$550M contracted; $375–$700M merchant), and reported Q2 adjusted EBITDA $351M and AFFO $328M; Safe Bulkers emphasized liquidity and disciplined capex—leverage ~30%, cash + revolver firepower ~$343M (cash ~$143M, $200M available facility), net debt per vessel ~$8M, contracted backlog ~$154M (Capes backlog >$105M), H1 revenue $169M, Q2 adjusted EBITDA $50.3M, average fleet age 10.3 years, Capesize/TCE and Kamsarmax spot levels cited (~$38,000 and ~$18,000) and raised its quarterly dividend to $0.075 (19 consecutive quarters, ~4% yield) while funding a $277M newbuild program; Penske raised its quarterly dividend to $1.44 (annualized $5.76, 2.9% yield), reported Q2 revenue $8.5B, EBT $354M, net income $260M, EPS $3.96, cut long‑term debt by $141M and expects improving Class 8 order books to benefit H2 results.Penske Automotive Group Financial Statement Overview
Summary
Income Statement
64
Positive
Balance Sheet
58
Neutral
Cash Flow
55
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 32.92B | 31.81B | 31.86B | 30.92B | 27.81B | 25.55B |
| Gross Profit | 5.31B | 5.22B | 5.22B | 5.15B | 4.84B | 4.44B |
| EBITDA | 1.72B | 1.70B | 1.73B | 1.85B | 2.11B | 1.82B |
| Net Income | 936.00M | 935.40M | 968.90M | 1.11B | 1.38B | 1.19B |
Balance Sheet | ||||||
| Total Assets | 18.49B | 18.38B | 16.72B | 15.67B | 14.11B | 13.46B |
| Cash, Cash Equivalents and Short-Term Investments | 69.50M | 64.70M | 72.40M | 96.40M | 106.50M | 100.70M |
| Total Debt | 9.25B | 8.82B | 8.27B | 7.74B | 6.95B | 6.40B |
| Total Liabilities | 12.65B | 12.80B | 11.49B | 10.92B | 9.94B | 9.37B |
| Stockholders Equity | 5.83B | 5.56B | 5.21B | 4.73B | 4.15B | 4.07B |
Cash Flow | ||||||
| Free Cash Flow | 592.10M | 650.50M | 811.10M | 718.30M | 1.18B | 1.04B |
| Operating Cash Flow | 894.00M | 975.10M | 1.18B | 1.09B | 1.46B | 1.29B |
| Investing Cash Flow | -761.00M | -175.00M | -1.04B | -572.30M | -641.70M | -623.10M |
| Financing Cash Flow | -222.00M | -825.50M | -164.70M | -531.10M | -798.00M | -615.50M |
Penske Automotive Group Technical Analysis
Positive
217.35
Price Trends
189.28
Positive
173.37
Positive
167.10
Positive
Market Momentum
9.32
Positive
63.74
Neutral
34.47
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 217.35 is above the 20-day moving average (MA) of 208.39, above the 50-day MA of 189.28, and above the 200-day MA of 167.10, indicating a bullish trend. The MACD of 9.32 indicates Positive momentum. The RSI at 63.74 is Neutral, neither overbought nor oversold. The STOCH value of 34.47 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 | $7.11B | 9.80 | 33.18% | ― | -0.06% | 35.87% | |
66 Neutral | $14.27B | 16.00 | 16.43% | 2.54% | 4.13% | -5.43% | |
66 Neutral | $8.47B | 12.72 | 7.00% | 0.65% | 1.97% | -10.60% | |
65 Neutral | $4.31B | 8.65 | 13.04% | ― | 4.12% | -2.47% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
60 Neutral | $8.13B | 35.57 | 3.67% | ― | -1.69% | -58.01% | |
52 Neutral | $3.42B | 11.92 | 9.96% | 0.63% | 0.81% | -33.60% |
* Consumer Cyclical Sector Average
PAG
Penske Automotive Group
215.76
41.95
24.13%
ABG
Asbury
219.47
-9.91
-4.32%
AN
AutoNation
215.78
20.27
10.37%
KMX
CarMax
56.67
0.45
0.80%
GPI
Group 1 Automotive
277.60
-143.15
-34.02%
LAD
Lithia Motors
368.57
73.96
25.10%
Penske Automotive Group Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresM&A Transactions
Penske Automotive posts Q2 revenue growth amid mixed earnings
Positive
Jul 29, 2026
In the second quarter of 2026, Penske Automotive Group reported a 6% year-on-year revenue increase to $8.5 billion and delivered more than 125,000 retail automotive units, while GAAP net income slipped to $260.4 million and earnings per share to $...
Business Operations and StrategyDividends
Penske Automotive Announces 23rd Consecutive Quarterly Dividend Increase
Positive
Jul 23, 2026
On July 23, 2026, Penske Automotive Group announced that its board approved a quarterly dividend of $1.44 per share, up $0.02 or 1.4%, marking the company’s 23rd consecutive quarterly dividend increase. The payout, which annualizes to $5.76 ...
Business Operations and StrategyDelistings and Listing ChangesM&A Transactions
Penske Automotive Group weighs take-private acquisition proposal
Neutral
Jul 22, 2026
On July 22, 2026, Penske Automotive Group announced that its board received an unsolicited, preliminary and non-binding proposal from Penske Corporation and Mitsui Co. to acquire the remaining common shares they do not already own for $210 per sh...
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...
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.