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Why Is Penske (PAG) Up 3.1% Since Last Earnings Report?
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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 3.1% 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 catalysts.
Penske Puts Up a Stellar Q4 Show
Penske reported reported fourth-quarter 2021 adjusted earnings of $4.10 per share, increasing 65% year over year and surpassing the Zacks Consensus Estimate of $3.67. Higher-than-expected gross profit in the Retail Commercial Truck and Commercial Vehicles Australia/Power Systems segments resulted in this outperformance. The auto retailer registered net sales of $6,296.1 million, outpacing the Zacks Consensus Estimate of $6,227.5 million. The top line also rose 8.3% from the comparable year-ago period’s levels.
The company’s gross profit in the reported quarter increased 31.3% on a year-over-year basis to $1,179.2 million. The operating income also rose 46.9% from the prior-year quarter’s level to $356.3 million.
For the December-end quarter, same-store retail unit sales declined 9.5% year over year to 97,816. Within the Retail Automotive segment, same-store new-vehicle revenues edged down 8.4% year over year to $2,260.4 million, while same-store used-vehicle revenues rose 21.7% to $2,020.7 million.
Segmental Performance
In the reported period, revenues in the Retail Automotive segment came in at $5,473.9 million, increasing 7.3% from fourth-quarter 2020 levels but missing the consensus mark of $5,656 million. Gross profit of $1,019 million increased 29.4% year over year but missed the consensus mark of $1,028 million.
Revenues in the Retail Commercial Truck segment increased 18.8% to $688.4 million. However, the figure lagged the consensus mark of $713 million. Gross profit in the segment was $118.9 million, up 50.8% from the year-earlier quarter’s figure and beating the consensus mark of $114 million.
The Commercial Vehicles Australia/Power Systems segment’s revenues in the reported quarter totaled $133.8 million, up 1.4% from the year-ago quarter’s levels but lagging the consensus mark of $144 million. Gross profit came in at $41.3 million, rising 27.5% from the 2020 level and surpassing the Zacks Consensus Estimate of $36.7 million.
Financial Tidbits
In the quarter under review, SG&A costs totaled $791.1 million, up 26.4% year over year. Penske had cash and cash equivalents of $100.7 million as of Dec 31, 2021, up from $49.5 million at 2020 end. The long-term debt amounted to $1,392 million, down from $1,602.1 million as of Dec 31, 2020.
In 2021, PAG returned more than $436 million to shareholders through share repurchases ($293.5 million) and cash dividends ($142.5 million). As of Feb 8, 2022, nearly $194.3 million remains available to repurchase additional shares under its existing share repurchase authorization.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 10.56% due to these changes.
VGM Scores
At this time, Penske has a strong Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, 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 A. 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 this revision looks promising. Notably, Penske has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Penske (PAG) Up 3.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Penske Automotive (PAG - Free Report) . Shares have added about 3.1% 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 catalysts.
Penske Puts Up a Stellar Q4 Show
Penske reported reported fourth-quarter 2021 adjusted earnings of $4.10 per share, increasing 65% year over year and surpassing the Zacks Consensus Estimate of $3.67. Higher-than-expected gross profit in the Retail Commercial Truck and Commercial Vehicles Australia/Power Systems segments resulted in this outperformance. The auto retailer registered net sales of $6,296.1 million, outpacing the Zacks Consensus Estimate of $6,227.5 million. The top line also rose 8.3% from the comparable year-ago period’s levels.
The company’s gross profit in the reported quarter increased 31.3% on a year-over-year basis to $1,179.2 million. The operating income also rose 46.9% from the prior-year quarter’s level to $356.3 million.
For the December-end quarter, same-store retail unit sales declined 9.5% year over year to 97,816. Within the Retail Automotive segment, same-store new-vehicle revenues edged down 8.4% year over year to $2,260.4 million, while same-store used-vehicle revenues rose 21.7% to $2,020.7 million.
Segmental Performance
In the reported period, revenues in the Retail Automotive segment came in at $5,473.9 million, increasing 7.3% from fourth-quarter 2020 levels but missing the consensus mark of $5,656 million. Gross profit of $1,019 million increased 29.4% year over year but missed the consensus mark of $1,028 million.
Revenues in the Retail Commercial Truck segment increased 18.8% to $688.4 million. However, the figure lagged the consensus mark of $713 million. Gross profit in the segment was $118.9 million, up 50.8% from the year-earlier quarter’s figure and beating the consensus mark of $114 million.
The Commercial Vehicles Australia/Power Systems segment’s revenues in the reported quarter totaled $133.8 million, up 1.4% from the year-ago quarter’s levels but lagging the consensus mark of $144 million. Gross profit came in at $41.3 million, rising 27.5% from the 2020 level and surpassing the Zacks Consensus Estimate of $36.7 million.
Financial Tidbits
In the quarter under review, SG&A costs totaled $791.1 million, up 26.4% year over year. Penske had cash and cash equivalents of $100.7 million as of Dec 31, 2021, up from $49.5 million at 2020 end. The long-term debt amounted to $1,392 million, down from $1,602.1 million as of Dec 31, 2020.
In 2021, PAG returned more than $436 million to shareholders through share repurchases ($293.5 million) and cash dividends ($142.5 million). As of Feb 8, 2022, nearly $194.3 million remains available to repurchase additional shares under its existing share repurchase authorization.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 10.56% due to these changes.
VGM Scores
At this time, Penske has a strong Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, 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 A. 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 this revision looks promising. Notably, Penske has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.