Strength Seen in Lithia Motors (LAD): Can Its 6.7% Jump Turn into More Strength?
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Lithia Motors (LAD) shares soared 6.7% in the last trading session to close at $305.46. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 0.1% loss over the past four weeks.
Lithia shares have gained since the company acquired three Duval Motor Company stores last week, marking its foray into the Florida market. These newly acquired dealerships are expected to generate more than $200 million in annual revenues. This move to expand its footprint in the highly profitable U.S. Southeast Region is in sync with the company’s growth strategy.
This auto dealership chain is expected to post quarterly earnings of $7.66 per share in its upcoming report, which represents a year-over-year change of -17.2%. Revenues are expected to be $9.47 billion, up 14.5% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Lithia Motors, the consensus EPS estimate for the quarter has been revised 1.1% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on LAD going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Lithia Motors is a member of the Zacks Automotive - Retail and Whole Sales industry. One other stock in the same industry, Sonic Automotive (SAH), finished the last trading session 3.6% higher at $58.53. SAH has returned -7.3% over the past month.
For Sonic Automotive , the consensus EPS estimate for the upcoming report has changed -2.6% over the past month to $1.51. This represents a change of -25.3% from what the company reported a year ago. Sonic Automotive currently has a Zacks Rank of #3 (Hold).
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Lithia Motors, Inc. (LAD) : Free Stock Analysis Report
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