Lithia Acquires 2 Stores in Southeast Region, Updates Buyback Plan

Lithia Motors, Inc. LAD has expanded its presence in the Southeast region by purchasing two Mercedes-Benz stores in Collierville, TN, and Jackson, MS, aiming to increase store density and luxury mix. This marks LAD’s first Mercedes-Benz presence in the region, which is expected to bring an estimated $220 million in annualized revenues. This underlines LAD’s focus on growing in high-performing regions and enhancing its luxury brand portfolio.

With this addition of stores, Lithia has acquired a total year-to-date expected annualized revenues of $400 million. The transaction was financed through the company’s existing on-balance sheet capacity.

In 2023 and 2024, Lithia added $3.8 billion and $5.9 billion, respectively, in annualized revenues through acquisitions. The company’s buyout binge is boosting its market share and strengthening its portfolio.

LAD prioritizes a balanced approach to capital allocation. This has resulted in viewing acquisitions and share repurchases as equally important. The company is determined to grow its U.S. market share to 5% through such strategic acquisitions and store expansions.

Since the beginning of the year until June 10, LAD has invested $230 million to repurchase approximately 729,000 shares at a weighted average price of $315 per share. As of June 10, $589 million remains under the current repurchase authorization.

LAD stock has gained 32.1% over the past year compared with the industry’s 20.1% growth.

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LAD’s Zacks Rank & Key Picks

LAD currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Auto space areDorman Products DORM, Standard Motor Products SMP and Luminar Technologies LAZR, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for DORM’s current-year earnings is pegged at $7.82 per share, indicating a 9.68% year-over-year rise.Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 28.95%. DORM’s shares have rallied 40.1% in the past year.

The Zacks Consensus Estimate for SMP’s current-year earnings is pegged at $3.58 per share, indicating a 12.93% year-over-year rise.Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 38.55%. SMP’s shares have gained 4.8% in the past year.

The Zacks Consensus Estimate for Luminar’s 2025 loss is pegged at $4.29 per share, indicating a rise of 53.57% from year-ago levels. The company’s earnings beat the consensus estimate in each of the trailing four quarters, with an average surprise of 11.79%.

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This article originally published on Zacks Investment Research (zacks.com).

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