Lithia Motors Inc Reaches 20-Day High on Buyback News
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 24 2024
0mins
Should l Buy LAD?
Source: 4
Lithia Motors Inc's stock rose by 3.01%, reaching a 20-day high as the company announced its share repurchase program.
The company has repurchased nearly 875,000 shares this quarter, investing $274 million, which reflects its confidence in profitability and cash flows. Year-to-date, Lithia has repurchased 2.98 million shares for nearly $933 million, representing 11.3% of outstanding shares.
This proactive approach to returning capital while the stock trades below intrinsic value is expected to enhance shareholder value and strengthen its market position, especially with the recent acquisition of Fines Ford in Canada, projected to add $100 million in annual revenue.
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Analyst Views on LAD
Wall Street analysts forecast LAD stock price to rise
8 Analyst Rating
6 Buy
2 Hold
0 Sell
Strong Buy
Current: 281.460
Low
310.00
Averages
388.00
High
500.00
Current: 281.460
Low
310.00
Averages
388.00
High
500.00
About LAD
Lithia Motors, Inc. is a global automotive retailer. The Company is engaged in providing an array of products and services throughout the vehicle ownership lifecycle. The Company offers convenient experiences through its comprehensive network of physical locations, e-commerce platforms, captive finance solutions and other synergistic adjacencies. The Company operates through two segments: Vehicle Operations and Financing Operations. Its Vehicle Operations consist of all aspects of its auto merchandising and service operations, including its retail automotive, recreational vehicles, and motorcycle franchises that sell new vehicles, used vehicles, parts, repair and maintenance services, and vehicle finance and insurance products. Its Financing Operations segment provides financing to customers buying and leasing retail vehicles from its Vehicle Operations. It operates approximately 464 locations representing 52 brands across the United States, the United Kingdom, and Canada.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Expansion Opportunity: Lithia Motors CEO Bryan DeBoer stated that while the company has 10 stores selling Chinese brands in the UK, it currently does not plan to sell them in the U.S. due to strict franchise laws and infrastructure needs.
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- Global Market Share Growth: Chinese automotive brands have seen their global market share jump nearly 70% in the past five years, posing a threat to U.S. automakers, particularly with brands like BYD and Nio anticipated to enter the U.S. market.
- Future Collaboration Possibilities: Although Lithia Motors is not planning to be early adopters in the U.S. market, DeBoer mentioned that the company is building relationships with several Chinese brands and will remain open to potential opportunities in the future.
See More
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- Decline in New Vehicle Sales: New vehicle sales fell 5.7% year-over-year to $4.626 billion, which may pose challenges to the company's profitability moving forward, highlighting the need for strategic adjustments.
- Capital Return Strategy: The company repurchased over 11% of its outstanding shares in 2025, demonstrating a commitment to effective capital allocation while maintaining a strong balance sheet, which enhances shareholder trust and confidence.
- Dividend Distribution: Lithia Motors approved a dividend of 55 cents per share, expected to be paid on March 20, 2026, reflecting the company's dedication to returning value to shareholders even amid profit pressures, thereby reinforcing market expectations of stability.
See More
Automakers Warn of Rising Prices Due to Tariffs
- Tariff Impact Intensifies: Sonic Automotive President Jeff Dyke warns that unsustainable tariff costs will lead automakers to either raise prices or cut features, indicating a pressing urgency within the industry and potential future price pressures.
- Limited Price Fluctuations: Despite only a 1% increase in vehicle prices since the Trump administration's tariffs, analyst Jessica Caldwell notes a surge in used vehicle demand as consumers anticipate new car price hikes, highlighting market sensitivity to pricing changes.
- Toyota's Financial Strain: Toyota reported a 25% drop in net income for the first nine months of fiscal year 2026, with tariffs costing approximately 1.2 trillion yen (around $8 billion), underscoring the significant impact of tariffs on major automakers and their profitability.
- Future Production Adjustments: Toyota may consider relocating some production back to the U.S. based on the outcomes of U.S.-Mexico-Canada trade negotiations, particularly for its Tacoma pickup made in Mexico, reflecting the company's strategic flexibility in addressing tariff challenges.
See More
U.S. Automotive Industry Faces Spring Test Amid Tax Season
- Tax Impact on Buying Intent: With tax season underway, the average tax refund for Americans is projected to rise by 10.9% to $2,290, potentially encouraging consumers priced out of the new vehicle market to reconsider purchases, thereby offering a short-term sales boost for the automotive industry.
- Historical Sales Trends: March is typically a peak month for U.S. vehicle sales, averaging 9.1% of annual new vehicle sales over the past 12 years, second only to December at 9.3%, suggesting that tax changes could drive a rebound in sales during this critical period.
- Loan Condition Changes: Despite current federal interest rates between 3.5% and 3.75%, leading to higher financing costs, consumers are agreeing to longer-term loans, with Carmax reporting an average monthly payment of $772 for new vehicles, reflecting buyers' adaptive strategies in a high-price environment.
- Low Consumer Confidence: Even with additional tax funds, consumer confidence fell to 84.5 in January, the lowest since May 2014, indicating that high prices and a weakening labor market negatively impact purchasing decisions, leaving buying intent under significant pressure.
See More
Investors Misinterpret Walmart's Guidance Amid Earnings Season
- Walmart Guidance Misinterpretation: Many investors reacted to Walmart's 2026 estimate by selling shares in premarket trading, causing a few percentage points drop, despite the stock recovering by the opening bell, highlighting ignorance of management's guidance preferences.
- Carvana's Stock Volatility: Following Carvana's quarterly earnings report, the stock plummeted by $60, over a 16% decline, even though analysis indicated that profitability per vehicle remained strong with advertising costs rising by less than $15, showcasing an overreaction to short-term fluctuations.
- DoorDash Stock Rally: During the analyst call, CEO confirmed that the acquired Deliveroo is growing rapidly while maintaining profitability, leading to a 10% surge in stock price early in the day, settling at a 4% increase by midday, reflecting market confidence in future growth.
- Trading Strategy Warning: While short-term trading can yield profits, the article emphasizes the importance of focusing on long-term holdings and fundamental analysis to avoid making poor decisions based on market sentiment fluctuations.
See More
Lithia Motors CEO Expresses Caution on Selling Chinese Brands in the U.S.
- Market Access Challenges: Lithia Motors CEO Bryan DeBoer stated that while the company operates 10 stores selling Chinese brands in the UK, it currently does not plan to sell these brands in the U.S. due to the complexities of franchise rules, highlighting significant market entry barriers.
- Investment Return Considerations: DeBoer emphasized that potential costs, return on investment, and infrastructure needs are major hindrances, particularly as establishing new retail and service operations in the U.S. would require substantial investments, impacting the company's profitability.
- Global Market Dynamics: Chinese brands have seen their global market share increase by nearly 70% over the past five years, posing a threat to U.S. automakers, which necessitates that Lithia Motors closely monitor this trend to adjust its market strategy accordingly.
- Future Collaboration Potential: Although Lithia is not currently looking to sell Chinese brands in the U.S., DeBoer mentioned that the company is building relationships with several Chinese brands and will remain open to potential collaboration opportunities in the future, maintaining market flexibility.
See More
Lithia Motors Cautious on Selling Chinese Brands in U.S.
- Market Expansion Opportunity: Lithia Motors CEO Bryan DeBoer stated that while the company has 10 stores selling Chinese brands in the UK, it currently does not plan to sell them in the U.S. due to strict franchise laws and infrastructure needs.
- Return on Investment Considerations: DeBoer highlighted that entering the U.S. market would require establishing new retail and service operations, necessitating entirely new investments, especially since approximately 50% to 60% of the company's profits come from service and parts, complicating entry.
- Global Market Share Growth: Chinese automotive brands have seen their global market share jump nearly 70% in the past five years, posing a threat to U.S. automakers, particularly with brands like BYD and Nio anticipated to enter the U.S. market.
- Future Collaboration Possibilities: Although Lithia Motors is not planning to be early adopters in the U.S. market, DeBoer mentioned that the company is building relationships with several Chinese brands and will remain open to potential opportunities in the future.
See More
Lithia Motors Reports Mixed Quarter with Resilient Used Vehicle Sales
- Used Vehicle Sales Growth: Lithia Motors reported a 6.1% increase in used revenue on a same-store basis, indicating strong performance in its used vehicle segment despite a soft new vehicle market, which boosts investor confidence in the company's future prospects.
- Decline in New Vehicle Sales: New vehicle sales fell 5.7% year-over-year to $4.626 billion, which may pose challenges to the company's profitability moving forward, highlighting the need for strategic adjustments.
- Capital Return Strategy: The company repurchased over 11% of its outstanding shares in 2025, demonstrating a commitment to effective capital allocation while maintaining a strong balance sheet, which enhances shareholder trust and confidence.
- Dividend Distribution: Lithia Motors approved a dividend of 55 cents per share, expected to be paid on March 20, 2026, reflecting the company's dedication to returning value to shareholders even amid profit pressures, thereby reinforcing market expectations of stability.
See More
