Can Lithia (LAD) keep its earnings streak in Q3? – October 14, 2021

Lithia Motors (BOY Free Report) is predicted to launch third quarter 2021 outcomes on October 20, forward of the opening bell. Zacks’ consensus estimate for earnings and income for the quarter to report is ready at $ 9.72 per share and $ 6.09 billion, respectively.

The auto retailer carried out higher than anticipated final quarter reported on increased than anticipated gross sales throughout all segments. In actual fact, Lithia has overwhelmed earnings estimates in every of the previous 4 quarters, averaging 28.3%. That is illustrated within the graphic beneath:

Pattern in revisions of estimates

Zacks’ consensus estimate for third quarter earnings per share has moved 18 cents north over the previous seven days. The measure reveals a big year-over-year enchancment of 41%. Moreover, Zacks’ consensus estimate for quarterly income suggests year-over-year development of 68.1%.

Issues to notice

Due to the financial restoration from the lows of the pandemic and the choice for private mobility, demand for autos has elevated, which has possible helped Lithia gross sales. Encouragingly, the auto retailer is predicted to publish a year-over-year improve in third-quarter income throughout all of its items. We anticipate Lithia’s Driveway e-commerce program to considerably assist the corporate’s income within the third quarter. Particularly, a better common promoting value for brand spanking new and used vehicles is more likely to have helped earnings.

Zacks’ consensus estimate for used car business income is $ 2,124 million, which signifies a rise from the $ 1,192 million recorded a 12 months in the past. The consensus mark of recent car phase income stands at $ 3,008 million, which suggests development of 59.7% 12 months over 12 months. Zacks’ consensus estimate for Finance & Insurance coverage and Fleet & Different income is ready at $ 273 million and $ 42.65 million, respectively, implying an enchancment from the corresponding quarter of 2020.

In the meantime, rising commodity prices, robust labor markets, and logistical inefficiencies amid the worldwide chip tightening are more likely to have performed havoc. Due to this fact, gross revenue is predicted to have decreased in comparison with the earlier 12 months. The consensus mark for gross margins within the used car retail phase is ready at 12.7%, indicating a decline from 13.2% within the third quarter of 2020.

Whispers of beneficial properties

Our confirmed mannequin doesn’t conclusively predict a rise in earnings for Lithia this time round. The mixture of a constructive earnings ESP and a Zacks Rank # 1 (Sturdy Purchase), 2 (Purchase) or 3 (Maintain) will increase the probabilities of a successful payout, which isn’t the case right here. . You’ll be able to uncover the perfect shares to purchase or promote earlier than they’re flagged with our ESP Earnings Filter.

ESP on earnings: The PSE of earnings, which is the distinction between probably the most correct estimate and the Zacks consensus estimate, is -1.28%. It is because probably the most correct estimate of earnings per share is 12 cents decrease than Zacks’ consensus estimate.

Zack Rank: Lithia at present has a Zacks Rank # 1. You’ll be able to see The complete record of in the present day’s Zacks # 1 Rank shares right here.

Actions to contemplate

Listed below are just a few firms within the automotive area that our mannequin has the correct mix of parts to provide you with a overwhelmed revenue this time round.

You are right here (TSLA Free Report) has an ESP of + 15.68% earnings and a Zacks # 1 rank. The inventory is predicted to launch its third quarter 2021 outcomes on October 20.

AutoNation (A Free Report) has + 2.45% Income ESP and Zacks # 1 rank. The inventory is predicted to launch its third quarter 2021 outcomes on October 21.

Group 1 Automotive (GPI Free Report) has an Earnings ESP of + 2.78% and a Zacks # 2 rank. The inventory is predicted to launch its third quarter 2021 outcomes on October 28.

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