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Penske Automotive Group Inc PAG

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Morningstar’s Analysis

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Economic Moat

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Stewardship

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Penske's Third Quarter Is an All-Time Record

Analyst Note

| David Whiston, CFA, CPA, CFE |

We suspected that Penske’s large United Kingdom exposure hurt the firm’s second-quarter results but once the U.K. reopened from the pandemic Penske could have a great quarter. Penske reported an all-time record quarterly profit of any quarter in its third-quarter results. Adjusted diluted EPS more than doubled year over year to $2.87 from $1.42 and easily beast Refinitiv’s consensus of $1.65. The stock on Oct. 22 closed down about 2%, however, which we think is more due to weakness in all dealer stocks that day than anything specific to Penske’s results. 

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Company Profile

Business Description

Penske Automotive Group owns and operates 145 U.S. light-vehicle franchises in 21 states and Puerto Rico as well as 172 franchises overseas, primarily in the United Kingdom. The company is the second-largest U.S.-based dealership in terms of light-vehicle revenue and sells more than 35 brands, with 93% of retail automotive revenue coming from luxury and import names. Other services, in addition to new and used vehicles, are parts and repair and finance and insurance. The firm's Premier Truck Group owns 25 truck dealerships selling mostly Freightliner and Western Star brands, and Penske owns the CarSense and CarShop used-vehicle stores. The company is based in Michigan and was called United Auto Group before changing its name in 2007.

Contact
2555 Telegraph Road
Bloomfield Hills, MI, 48302-0954
T +1 248 648-2500
Sector Consumer Cyclical
Industry Auto & Truck Dealerships
Most Recent Earnings Jun 30, 2020
Fiscal Year End Dec 31, 2019
Stock Type Cyclical
Employees 27,000

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