MEDFORD, Ore. - Lithia & Driveway (NYSE: LAD) has expanded its share repurchase plan, with its Board of Directors approving an additional $350 million for stock buybacks. This move increases the automotive retailer's total repurchase authorization to approximately $660 million.
The company's President and CEO, Bryan DeBoer, commented on the decision, stating, "Increasing our share repurchase authorization reflects confidence in our long-term growth and profitability." DeBoer highlighted that the company's strategy is now focused on operational excellence and capital deployment to maximize shareholder returns.
So far this year, Lithia & Driveway has invested over $156 million to buy back nearly 609,500 shares, representing 2.2% of its outstanding shares, at an average price of $257 per share.
Lithia & Driveway, listed on the New York Stock Exchange under the ticker LAD, ranks among the largest automotive retailers globally. The company offers a variety of products and services across the vehicle ownership lifecycle, leveraging a network of physical locations and digital platforms. Lithia & Driveway aims to provide simple, convenient, and transparent experiences through its e-commerce platforms, finance solutions, and other related services.
The announcement is based on a press release statement from Lithia Motors (NYSE:LAD), Inc. and reflects the company's strategy to enhance shareholder value through its share repurchase program. The information provided does not include any speculative content or subjective assessment and is presented as a factual report on the company's financial activity.
In other recent news, Lithia Motors has experienced significant developments. The company reported a 23% rise in revenues to $8.6 billion for the first quarter of 2024. Despite challenges such as a slight decline in new gross profit per unit (GPU), Lithia Motors remains focused on operational performance and market share expansion. The company's UK business, which contributes 18% to the revenue mix, has lower vehicle GPUs but is expected to support long-term earnings growth.
Analysts have also adjusted their outlooks on Lithia Motors. Evercore ISI cut the company's stock price target to $360, citing earnings drag from Pendragon GPUs and increased selling, general, and administrative expenses. Similarly, Craig-Hallum reduced the company's price target to $310 after considering first-quarter results impacted by operational challenges. Despite these adjustments, both firms maintain positive ratings for Lithia Motors.
Jefferies also maintained a Buy rating on the company but lowered the price target to $325 following a first-quarter adjusted earnings per share (EPS) of $6.11, which fell short of the consensus estimate. The firm anticipates that increasing new vehicle volumes and the stabilization of used GPUs will act as positive factors for Lithia Motors in 2024. These recent developments highlight the ongoing financial and operational evolution of Lithia Motors.
InvestingPro Insights
Lithia & Driveway (NYSE: LAD) has demonstrated a strong commitment to returning value to shareholders, not only through its increased share repurchase plan but also by consistently raising its dividend. The company has a notable track record, having raised its dividend for 10 consecutive years. This consistent dividend growth is a testament to its financial discipline and commitment to shareholders.
Analyzing the financial health and market performance of Lithia & Driveway, InvestingPro data reveals a market capitalization of $7.39 billion, which underscores its significant presence in the Specialty Retail industry. A key metric that stands out is the company's price-to-earnings (P/E) ratio, which at 7.57 for the last twelve months as of Q1 2024, indicates that the stock is trading at a low earnings multiple compared to industry peers. Additionally, with a price-to-book (P/B) ratio of 1.16, the company's stock may be appealing to value investors looking for assets trading at near book value.
Revenue growth also appears robust, with a 14.67% increase over the last twelve months as of Q1 2024, reflecting the company's operational success. However, one of the InvestingPro Tips suggests that the company operates with a significant debt burden, which is an important consideration for investors assessing the company's risk profile. Furthermore, with 8 analysts having revised their earnings estimates downwards for the upcoming period, investors should stay informed about potential impacts on future profitability.
For those interested in deeper analysis and additional insights, InvestingPro offers more tips to help investors make informed decisions. There are 12 additional tips available for Lithia & Driveway, which can be accessed through InvestingPro's comprehensive platform. To enrich your investment strategy with these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
The recent share repurchase plan and the company's strategic focus on operational excellence indicate Lithia & Driveway's confidence in its business model. With a blend of physical and digital retail strategies, the company is well-positioned to navigate the evolving automotive industry landscape.
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