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Penske (PAG) Signs Deal to Acquire 3 Dealerships in Australia

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Penske Automotive Group, Inc. (PAG - Free Report) , in an effort to expand its retail automotive operations in Australia, is set to acquire two Porsche dealerships and a Ducati motorcycle dealership in Melbourne.

The premium vehicle retailer has signed a deal to acquire Porsche Centre Brighton, Porsche Centre Doncaster and Ducati Melbourne West. The Brighton dealership, which is around 20 minutes away from central Melbourne, commenced operations in March 2009 and has been catering to the Porsche community in Melbourne for nearly 15 years. The Doncaster dealership represents the latest addition to the official Porsche Centre and is situated in high-growth northeast Melbourne suburbs.

The transaction is expected to complete in the second quarter of 2024, pending the fulfillment of customary conditions.

Penske is riding high on its strategic acquisitions. It has become the largest dealership group for Freightliner in North America with the buyout of Warner Truck Centers. This aided the company to diversify its business, expand its customer base and capitalize on the Retail Commercial Trucks segment.

The buyouts of Kansas City Freightliner, McCoy, Team Trucks Centers and Transolutions Truck Centres are boosting PAG’s top line.

In 2023, the company completed acquisitions worth more than $340 million in annualized revenues. The acquisition of Rybrook Group, completed in January 2024, is expected to add $1 billion to Penske's annualized revenues.

Zacks Rank & Key Picks

PAG currently carries a Zacks Rank #4 (Sell).

Some better-ranked players in the auto space are Geely Automobile Holdings Limited (GELYY - Free Report) , Toyota Motor Corporation (TM - Free Report) and Allison Transmission Holdings, Inc. (ALSN - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for GELYY’s 2024 sales suggests year-over-year growth of 36.6%. The earnings per share (EPS) estimates for 2024 and 2025 have moved up 34 cents and 54 cents, respectively, in the past 30 days.

The Zacks Consensus Estimate for TM’s 2024 sales and earnings suggests year-over-year growth of 10% and 73.6%, respectively. The EPS estimates for 2024 and 2025 have improved $3.58 and $3.26, respectively, in the past 60 days.

The Zacks Consensus Estimate for ALSN’s 2024 sales and earnings suggests year-over-year growth of 2.1% and 3.2%, respectively. The EPS estimates for 2024 and 2025 have improved 67 cents and 71 cents, respectively, in the past 30 days.

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