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Penske (PAG) Up 4.5% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Penske Automotive (PAG - Free Report) . Shares have added about 4.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Penske due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Penske Beats Q4 Earnings Estimates
Penske reported fourth-quarter 2022 adjusted earnings of $4.21 per share, which increased from $4.10 and surpassed the Zacks Consensus Estimate of $4.03. Higher-than-expected revenues in the Retail Automotive and Retail Commercial Truck segments resulted in this outperformance. The auto retailer registered net sales of $7,012 million, which topped the Zacks Consensus Estimate of $6,378 million. The top line rose 11.4% from the year-ago quarter.
Penske’s gross profit in the reported quarter increased 0.3% on a year-over-year basis to $1,183.2 million. The operating income went down 5.8% to $335.5 million.
In the reported quarter, same-store retail units rose 2.3% year over year to 102,906. Within the Retail Automotive segment, same-store new-vehicle revenues were up 12.7% to $2,618.8 million, and same-store used-vehicle revenues fell 8.5% to $1,909.2 million.
Segmental Performance
In the reported period, revenues in the Retail Automotive segment came in at $5,910.4 million, increasing 8% from a year ago and topping the consensus mark of $5,384 million. Gross profit of $1,008.8 million declined from $1019 million recorded in 2022.
Revenues in the Retail Commercial Truck segment increased 39.6% to $960.8 million and exceeded the consensus mark of $826 million. Gross profit in the segment was $138.2 million, rising 16.2% from the year-earlier quarter’s figure.
The Commercial Vehicle Distribution and Other segment’s revenues in the reported quarter increased 5% to $140.6 million and lagged the consensus mark of $143 million. Gross profit came in at $36.2 million, declining from $41.3 million in the year-ago period.
Financial Tidbits
In the quarter under review, SG&A costs totaled $815.5 million, up 3.1% year over year. Penske had cash and cash equivalents of $106.5 million as of Dec 31, 2022, up from $100.7 million in 2021 end. The long-term debt amounted to $1,546.9 million, up from $1,392 million as of Dec 31, 2021. In 2022, PAG repurchased 8.2 million shares of common stock for $886.5 million. The company also hiked its payout by 7% to 61 cents a share.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 12.01% due to these changes.
VGM Scores
At this time, Penske has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Penske has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Penske belongs to the Zacks Automotive - Retail and Whole Sales industry. Another stock from the same industry, Asbury Automotive Group (ABG - Free Report) , has gained 1.4% over the past month. More than a month has passed since the company reported results for the quarter ended December 2022.
Asbury Automotive reported revenues of $3.71 billion in the last reported quarter, representing a year-over-year change of +39.6%. EPS of $9.12 for the same period compares with $7.46 a year ago.
Asbury Automotive is expected to post earnings of $7.84 per share for the current quarter, representing a year-over-year change of -15.4%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.3%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Asbury Automotive. Also, the stock has a VGM Score of A.
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Penske (PAG) Up 4.5% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Penske Automotive (PAG - Free Report) . Shares have added about 4.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Penske due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Penske Beats Q4 Earnings Estimates
Penske reported fourth-quarter 2022 adjusted earnings of $4.21 per share, which increased from $4.10 and surpassed the Zacks Consensus Estimate of $4.03. Higher-than-expected revenues in the Retail Automotive and Retail Commercial Truck segments resulted in this outperformance. The auto retailer registered net sales of $7,012 million, which topped the Zacks Consensus Estimate of $6,378 million. The top line rose 11.4% from the year-ago quarter.
Penske’s gross profit in the reported quarter increased 0.3% on a year-over-year basis to $1,183.2 million. The operating income went down 5.8% to $335.5 million.
In the reported quarter, same-store retail units rose 2.3% year over year to 102,906. Within the Retail Automotive segment, same-store new-vehicle revenues were up 12.7% to $2,618.8 million, and same-store used-vehicle revenues fell 8.5% to $1,909.2 million.
Segmental Performance
In the reported period, revenues in the Retail Automotive segment came in at $5,910.4 million, increasing 8% from a year ago and topping the consensus mark of $5,384 million. Gross profit of $1,008.8 million declined from $1019 million recorded in 2022.
Revenues in the Retail Commercial Truck segment increased 39.6% to $960.8 million and exceeded the consensus mark of $826 million. Gross profit in the segment was $138.2 million, rising 16.2% from the year-earlier quarter’s figure.
The Commercial Vehicle Distribution and Other segment’s revenues in the reported quarter increased 5% to $140.6 million and lagged the consensus mark of $143 million. Gross profit came in at $36.2 million, declining from $41.3 million in the year-ago period.
Financial Tidbits
In the quarter under review, SG&A costs totaled $815.5 million, up 3.1% year over year. Penske had cash and cash equivalents of $106.5 million as of Dec 31, 2022, up from $100.7 million in 2021 end. The long-term debt amounted to $1,546.9 million, up from $1,392 million as of Dec 31, 2021. In 2022, PAG repurchased 8.2 million shares of common stock for $886.5 million. The company also hiked its payout by 7% to 61 cents a share.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 12.01% due to these changes.
VGM Scores
At this time, Penske has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Penske has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Penske belongs to the Zacks Automotive - Retail and Whole Sales industry. Another stock from the same industry, Asbury Automotive Group (ABG - Free Report) , has gained 1.4% over the past month. More than a month has passed since the company reported results for the quarter ended December 2022.
Asbury Automotive reported revenues of $3.71 billion in the last reported quarter, representing a year-over-year change of +39.6%. EPS of $9.12 for the same period compares with $7.46 a year ago.
Asbury Automotive is expected to post earnings of $7.84 per share for the current quarter, representing a year-over-year change of -15.4%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.3%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Asbury Automotive. Also, the stock has a VGM Score of A.