KeyBanc Starts Lithia Motors (LAD) at Buy; Margin Stability and A Unique Geographic Mix

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LAD Hot Sheet

Rating Summary:
4 Buy, 0 Hold, 0 Sell

Rating Trend:

Up

Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23

KeyBanc initiates coverage on Lithia Motors (NYSE: LAD) with a Buy. PT $30.00.

KeyBanc analyst said, "We are initiating coverage of LAD with a BUY as: 1) a slightly differentiated business model (franchise exclusivity) and a unique geographic mix (approximately 50%Pacific Northwest) distinguishes the Company from its peers, while it is also well positioned in terms of scale and associated cost savings, ownership of real estate and a relatively clean balance sheet (excluding mortgage debt); 2) catalysts exist for near and longer-term increases in the U.S. light vehicle SAAR-in particular, we are encouraged that market share at Chrysler (30% of sales) appears to have stabilized and LAD's product portfolio is expected to improve; 3) LAD appears well positioned to grow through acquisitions, and given company size and share count, could materially impact results...We are introducing earnings estimates of $1.88 (First Call consensus $1.88) for 2011 and $2.05 (First Call consensus $2.04) for 2012."

For an analyst ratings summary and ratings history on Lithia Motors click here. For more ratings news on Lithia Motors click here.

Shares of Lithia Motors closed at $24.16 yesterday, with a 52 week range of $12.50-$24.67.

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