Penske Earnings: Used-Vehicle Headwinds Remain but Should Improve Over 2024–25

Penske finished 2023 with a solid quarter, but one with continued pressure from used-vehicle affordability, a common problem in our dealer coverage due to the chip shortage driving new and used-vehicle pricing higher amid tight vehicle supply. We retain our fair value estimate but will reassess all modeling inputs after the 10-K is filed. A modest increase is possible due to a lower share count after modeling further buybacks in 2024, however, 2024 equity method income is also likely to be far lower than we presently model, which could offset the share count decline.