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Can Penske (PAG) Maintain Its Beat Streak in Q2 Earnings?
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Penske Automotive Group (PAG - Free Report) is slated to release second-quarter 2022 results on Jul 27, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $4.38 and $7.06 billion, respectively.
The auto retailer came up with better-than-anticipated results in the last reported quarter on higher-than-expected gross profit in the Retail Automotive and Retail Commercial Truck segments. Over the preceding four quarters, the company topped estimates on all occasions, with the average being 17.7%. This is depicted in the graph below:
Penske Automotive Group, Inc. Price and EPS Surprise
The Zacks Consensus Estimate for Penske’s second-quarter earnings per share has been revised downward by 1 cent in the past 60 days. The bottom-line projection implies a year-on-year decline of 2.01%. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year increase of 1.1%.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Penske this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.
Earnings ESP: Penske has an Earnings ESP of -0.63%. This is because the Most Accurate Estimate is pegged 3 cents lower than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The automotive retailer’s second-quarter results will reflect the robust demand for vehicles along with rising average prices per vehicle. However, a supply-demand mismatch amid the chip crisis is expected to have put a lid on inventory and sales. Additionally, Penske has been bearing the brunt of rising selling, general and administrative (SG&A) expenses amid CarShop expansion, the ramp-up of e-commerce activities and the introduction of new tools and technologies. In the last reported quarter, SG&A flared up more than 20.1% year over year. The trend of escalating SG&A costs is expected to have dented margins.
Here's a peek into the key predictions for revenues and gross profit across Penske’s segments.
The Zacks Consensus Estimate for the to-be-reported quarter’s revenues from the Retail Automotive segment — which accounts for the bulk of Penske’s overall top line — is pegged at $6,031 million, indicating a contraction from the $6,198 million recorded in the year-ago quarter. Also, gross profit for the segment is pegged at $1,037 million, implying a decline from $1,040 million reported in the prior-year period.
For the June-end quarter, the consensus mark for revenues in the Retail Commercial Truck segment stands at $747 million, suggesting growth of $625 million from the year-ago level. The estimate for gross profit stands at $80 million, suggesting a fall from the year-earlier level of $103 million.
The consensus mark for revenues in the Commercial Vehicles Australia/Power Systems and Other for second-quarter 2022 is pegged at $166 million, implying a nominal increase from $165 million recorded in second-quarter 2021. The same for gross profit for the segment is $43.4 million, implying an uptick of 9.5% year over year.
Stocks With the Favorable Combination
Here are a few stocks in the auto sector that are lined up to release quarterly results soon. Encouragingly, our model predicts an earnings beat for these stocks:
Oshkosh Corporation (OSK - Free Report) has an Earnings ESP of +8.67% and a Zacks Rank #3. The stock is set to report second-quarter 2022 earnings on Jul 28.
The Zacks Consensus Estimate for Oshkosh’s to-be-reported quarter’s earnings and revenues is pegged at 93 cents per share and $2.2 billion, respectively. Over the trailing four quarters, OSK surpassed earnings estimates twice for as many misses, with the average negative surprise being 1.21%.
Magna International (MGA - Free Report) has an Earnings ESP of +5.82% and a Zacks Rank #3. The company is slated to release second-quarter results on Jul 29.
The Zacks Consensus Estimate for Magna’s to-be-reported quarter’s earnings and revenues is pegged at 95 cents per share and $8.77 billion, respectively. Over the trailing four quarters, MGA surpassed earnings estimates twice for as many misses, with the average being 12.6%.
Lear Corporation (LEA - Free Report) has an Earnings ESP of +6.93% and a Zacks Rank #3. The company is set to post second-quarter results on Aug 2.
The Zacks Consensus Estimate for Lear’s to-be-reported quarter’s earnings and revenues is pegged at $1.18 per share and $4.75 billion, respectively. LEA surpassed earnings estimates in three of the last four quarters and missed once, with the average being 6.53%.
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Can Penske (PAG) Maintain Its Beat Streak in Q2 Earnings?
Penske Automotive Group (PAG - Free Report) is slated to release second-quarter 2022 results on Jul 27, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $4.38 and $7.06 billion, respectively.
The auto retailer came up with better-than-anticipated results in the last reported quarter on higher-than-expected gross profit in the Retail Automotive and Retail Commercial Truck segments. Over the preceding four quarters, the company topped estimates on all occasions, with the average being 17.7%. This is depicted in the graph below:
Penske Automotive Group, Inc. Price and EPS Surprise
Penske Automotive Group, Inc. price-eps-surprise | Penske Automotive Group, Inc. Quote
Trend in Estimate Revisions
The Zacks Consensus Estimate for Penske’s second-quarter earnings per share has been revised downward by 1 cent in the past 60 days. The bottom-line projection implies a year-on-year decline of 2.01%. The Zacks Consensus Estimate for quarterly revenues suggests a year-over-year increase of 1.1%.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Penske this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.
Earnings ESP: Penske has an Earnings ESP of -0.63%. This is because the Most Accurate Estimate is pegged 3 cents lower than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Penske currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors at Play
The automotive retailer’s second-quarter results will reflect the robust demand for vehicles along with rising average prices per vehicle. However, a supply-demand mismatch amid the chip crisis is expected to have put a lid on inventory and sales. Additionally, Penske has been bearing the brunt of rising selling, general and administrative (SG&A) expenses amid CarShop expansion, the ramp-up of e-commerce activities and the introduction of new tools and technologies. In the last reported quarter, SG&A flared up more than 20.1% year over year. The trend of escalating SG&A costs is expected to have dented margins.
Here's a peek into the key predictions for revenues and gross profit across Penske’s segments.
The Zacks Consensus Estimate for the to-be-reported quarter’s revenues from the Retail Automotive segment — which accounts for the bulk of Penske’s overall top line — is pegged at $6,031 million, indicating a contraction from the $6,198 million recorded in the year-ago quarter. Also, gross profit for the segment is pegged at $1,037 million, implying a decline from $1,040 million reported in the prior-year period.
For the June-end quarter, the consensus mark for revenues in the Retail Commercial Truck segment stands at $747 million, suggesting growth of $625 million from the year-ago level. The estimate for gross profit stands at $80 million, suggesting a fall from the year-earlier level of $103 million.
The consensus mark for revenues in the Commercial Vehicles Australia/Power Systems and Other for second-quarter 2022 is pegged at $166 million, implying a nominal increase from $165 million recorded in second-quarter 2021. The same for gross profit for the segment is $43.4 million, implying an uptick of 9.5% year over year.
Stocks With the Favorable Combination
Here are a few stocks in the auto sector that are lined up to release quarterly results soon. Encouragingly, our model predicts an earnings beat for these stocks:
Oshkosh Corporation (OSK - Free Report) has an Earnings ESP of +8.67% and a Zacks Rank #3. The stock is set to report second-quarter 2022 earnings on Jul 28.
The Zacks Consensus Estimate for Oshkosh’s to-be-reported quarter’s earnings and revenues is pegged at 93 cents per share and $2.2 billion, respectively. Over the trailing four quarters, OSK surpassed earnings estimates twice for as many misses, with the average negative surprise being 1.21%.
Magna International (MGA - Free Report) has an Earnings ESP of +5.82% and a Zacks Rank #3. The company is slated to release second-quarter results on Jul 29.
The Zacks Consensus Estimate for Magna’s to-be-reported quarter’s earnings and revenues is pegged at 95 cents per share and $8.77 billion, respectively. Over the trailing four quarters, MGA surpassed earnings estimates twice for as many misses, with the average being 12.6%.
Lear Corporation (LEA - Free Report) has an Earnings ESP of +6.93% and a Zacks Rank #3. The company is set to post second-quarter results on Aug 2.
The Zacks Consensus Estimate for Lear’s to-be-reported quarter’s earnings and revenues is pegged at $1.18 per share and $4.75 billion, respectively. LEA surpassed earnings estimates in three of the last four quarters and missed once, with the average being 6.53%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.