Goldman Sachs Downgrades Penske Automotive Group (PAG) to Sell; Valuation Call

Goldman Sachs downgraded Penske Automotive Group (NYSE: PAG) from Neutral to Sell with a price target of $27.00 (from $29.00).

Analyst, Patrick Archambault, said, "We see only 10% upside vs. our coverage
average of 39%. With PAG’s significant outperformance (up 25% ytd) the company now screens at the low end of our dealer stock selection framework as valuation is no longer enough to offset a below average growth outlook. We also see downside risk to 2012/2013 EPS estimates where we are 3% and 4% below consensus. Within our coverage we prefer the suppliers over the dealers, as suppliers are more directly levered to normalizing light vehicle demand and have significantly underperformed."

FY12 EPS estimate lowered from $2.15 to $2.10, FY13 from $2.39 to $2.30 and FY14 from $2.58 to $2.45.

For an analyst ratings summary and ratings history on Penske Automotive Group click here. For more ratings news on Penske Automotive Group click here.

Shares of Penske Automotive Group closed at $24.22 yesterday.

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