Penske Q2 revenue beats expectations, raises dividend

Overview

• U.S. auto and truck retailer's Q2 revenue rose 6%, beating analyst expectations

• Adjusted EPS for Q2 beat analyst expectations

• Company raised quarterly dividend by 1.4% to $1.44 per share

Outlook

• Company says improved freight environment is driving strong Class 8 truck order activity

• Penske expects recent acquisitions to add $2 bln in estimated annualized revenue

Result Drivers

• UNIT DELIVERIES - Co said 5% increase in new and used automotive units delivered was driven by resilient consumer demand and improved new vehicle availability

• SERVICE AND PARTS - Service and parts gross margin improved by 80 basis points, with same-store service and parts revenue up 2% and gross profit up 3%

• COMMERCIAL TRUCK MARKET - Improved freight environment led to increased Class 8 truck orders and a 5% rise in service and parts revenue in commercial truck dealerships

Company press release: ID:nPnvg8VHa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 3 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"

• Wall Street's median 12-month price target for Penske Automotive Group Inc is $210.00, about 4.5% below its July 28 closing price of $220.01

• The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 11 three months ago

Reuters Recommended Reads

• July 28 - Rush Enterprises Q2 revenue slightly beats estimates

• July 28 - Asbury Automotive Q2 adjusted EPS beats estimates on used vehicle profitability

• July 28 - PACCAR Q2 revenue and EPS beat expectations on strong truck orders

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)