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Outlook and valuation of Lithia Motors
Morgan Stanley analysts upgraded Lithia Motors to overweight from underweight, following a sell-off resulting in a ~30% drop in Lithia’s share price.
Analyzing Lithia Motors’s leverage and liquidity profile
The combined entities of Lithia Motors and DCH Auto Group are expected to generate free cash flow of $135 million in 2015.
Lithia Motors, DCH Auto Group create a powerhouse auto retailer
In October 2014, Lithia completed its acquisition of DCH Auto Group for an estimated price of $669.5 million.
Analyzing Lithia’s throughput contribution and earnings
Lithia’s income from operations in the nine months ending September 30, 2014, was $165.9 million, up from $137.9 million in the previous year.
Key analysis of Lithia’s used vehicle operations
The larger share of CPOs and core vehicles in its sales mix drives Lithia’s significant lead in same-store gross profit per vehicle.
Glenview Capital builds up position in Lithia Motors
Lithia targets mid-sized regional markets for domestic and imported vehicles, protecting the company from losing market share to leading industry players.