Financial Data and Key Metrics Changes - The company reported record first quarter revenue of $7.6 billion, a 2% increase year-over-year [5][6] - Earnings before taxes reached $337 million, with net income at $244 million, resulting in earnings per share of $3.66, a 14% increase [6][8] - Adjusted earnings before taxes increased 5% to $310 million, and adjusted net income also rose 5% to $226 million, with adjusted earnings per share increasing 6% to $3.39 [6][8] - The company achieved a stable gross margin for the seventh consecutive quarter, with a 70 basis point improvement in adjusted selling, general and administrative expenses as a percentage of gross profit compared to the previous year [5][6] Business Line Data and Key Metrics Changes - Same store retail automotive revenue increased by 2%, with related gross profit up 3% [5][6] - Same store retail automotive service and parts revenue rose 4%, with gross profit increasing by 6% [6][10] - New automotive units delivered increased by 68% on a same store basis, while used automotive units declined by 16% on a same store basis due to strategic realignment [8][9] - Average transaction prices for new vehicles increased by 4% to $59,202, while used vehicle transaction prices rose by 12% to $37,624 [9][10] Market Data and Key Metrics Changes - Approximately 59% of revenue was generated in North America, 30% in the UK, and 9% in other international markets [7] - In the UK, new vehicle market registrations increased by 6%, with the company outperforming the market with a 9% increase in same store new units delivered [21][22] - The US market saw an 8% increase in new units sold, with leasing on new vehicles rising to 33% [13][15] Company Strategy and Development Direction - The company emphasizes diversification as a key differentiator, with a premium brand mix and investments in various markets [7][8] - The focus on inventory management and cost control is critical for sustaining profitability and efficiency [38][60] - The company is committed to maintaining a strong balance sheet and cash flow to support growth through acquisitions and shareholder returns [26][28] Management's Comments on Operating Environment and Future Outlook - Management noted that the automotive and commercial truck markets remain fluid, with ongoing tariff negotiations impacting pricing strategies [6][7] - The company is optimistic about its diversified model's ability to adapt to changing market conditions [32] - Management highlighted the importance of technician recruitment and training to support service and parts operations [41][89] Other Important Information - The company generated $283 million in cash flow from operations, with EBITDA at $400 million [27] - Capital expenditures were down $26 million year-over-year, with $82 million paid in dividends during the quarter [27][28] - The company repurchased 255,000 shares for $40 million during the quarter, with a total of 750,000 shares repurchased year-to-date [27][28] Q&A Session Summary Question: Update on the UK market and Sytner Select - Management reported a 9% increase in same store new units delivered in the UK, with improved inventory management contributing to better gross profit [36][38] Question: Impact of warranty work on customer pay - Warranty work has increased significantly, impacting customer pay growth, but management noted improvements in gross profit per technician and service absorption [41][45] Question: Price elasticity of demand amid tariff discussions - Management indicated that while price increases are expected, the premium luxury segment may absorb these changes better due to higher residual values [47][49] Question: Sustainability of SG&A costs - Management expressed confidence in maintaining flat SG&A costs as a percentage of gross profit, attributing this to effective cost control measures [59][60] Question: Opportunities in the used vehicle market - Management emphasized a focus on younger used vehicles (0-4 years old) to maintain profitability and avoid brand damage from older inventory [82][84] Question: Capacity for parts and service growth - Management confirmed that there is capacity to grow service operations, with plans to continue increasing technician headcount [88][89] Question: Tariff impact on parts and service inflation - Management acknowledged potential parts inflation due to tariffs but noted that labor costs dominate repair orders, which may mitigate the impact [93][94] Question: Outlook for new GPU trends - Management indicated that new GPU trends are stabilizing, with expectations for continued improvement in gross profit margins [99][100]

Financial Data and Key Metrics Changes - The company reported record first quarter revenue of $7.6 billion, a 2% increase year-over-year [6][7] - Earnings before taxes were $337 million, with net income of $244 million, resulting in earnings per share of $3.66, a 14% increase [7] - Adjusted earnings before taxes increased 5% to $310 million, and adjusted net income also rose 5% to $226 million, with adjusted earnings per share up 6% to $3.39 [7][29] Business Line Data and Key Metrics Changes - Same store retail automotive revenue increased by 2%, with related gross profit up 3% [6][7] - Same store retail automotive service and parts revenue rose 4%, with gross profit increasing by 6% [7] - New automotive units delivered increased by 68% on a same store basis, while used automotive units declined by 16.1% [9][10] Market Data and Key Metrics Changes - Approximately 59% of revenue was generated in North America, 30% in the UK, and 9% in other international markets [8] - In the UK, new vehicle market registrations increased by 6%, with same store new units delivered up by 9% [22][23] - In Australia, the company gained 150 basis points of market share in the on-highway market [26] Company Strategy and Development Direction - The company emphasizes diversification as a key differentiator, with a premium brand mix and investments in various markets [8] - The focus on inventory management and cost control is expected to sustain profitability [40][41] - The company is committed to maintaining a strong balance sheet and capital allocation strategy, including share repurchases and dividends [28][29] Management's Comments on Operating Environment and Future Outlook - The management noted that the automotive and commercial truck markets remain fluid, with ongoing tariff negotiations impacting pricing strategies [7][8] - The company is optimistic about its diversified model's ability to adapt to changing market conditions [34] - Management highlighted the importance of technician recruitment and training to support service operations [44][90] Other Important Information - The company generated $283 million in cash flow from operations during Q1, with EBITDA of $400 million [29] - The company repurchased 255,000 shares for $40 million during the quarter, with plans for continued opportunistic buybacks [29][30] - The dividend was increased by 54% since the end of 2023, with a current yield of approximately 3.1% [30][31] Q&A Session Summary Question: Update on the UK market and Sytner Select - Management reported a 9% increase in same store new units delivered in the UK, with improved inventory management contributing to better gross profit [39][40] Question: Impact of warranty work on customer pay in parts and service - Management acknowledged that warranty work has increased, impacting customer pay growth, but noted improvements in gross profit per technician [42][44] Question: Price elasticity of demand amid tariff discussions - Management indicated that while there may be some impact on pricing, the premium luxury segment remains resilient, with leasing options helping mitigate costs [49][50] Question: Sustainability of SG&A costs - Management expressed confidence in maintaining flat SG&A costs as a percentage of gross profit, attributing this to effective cost control measures [63][66] Question: Opportunities in the used vehicle market - Management emphasized a focus on younger used vehicles (zero to four years old) to maintain profitability and avoid brand damage [84][88] Question: Parts inflation and customer willingness to pay - Management noted that parts inflation could be influenced by tariffs, but customer willingness to pay remains strong [93][94]

Financial Performance - First quarter revenue increased 2% to a record $7.6 billion compared to the same period in 2024[1] - Net income attributable to common stockholders rose 14% to $244.3 million, with earnings per share increasing 14% to $3.66[1] - Adjusted net income increased 5% to $226.3 million, and adjusted earnings per share rose 6% to $3.39[1] - Total revenue for the three months ended March 31, 2025, was $7,604.5 million, an increase of 2.1% from $7,447.8 million in the same period of 2024[22] - Gross profit for the three months ended March 31, 2025, was $1,269.0 million, up from $1,245.2 million in 2024, reflecting a gross margin of 16.7%[22] - The company reported an EBITDA of $399.5 million for the three months ended March 31, 2025, compared to $353.9 million in 2024[23] - Net Income attributable to Common Stockholders rose to $244.3 million in Q1 2025, a 13.5% increase from $215.2 million in Q1 2024[38] - Adjusted Net Income attributable to Common Stockholders increased by 5.2% to $226.3 million in Q1 2025 from $215.2 million in Q1 2024[38] - EBITDA for Q1 2025 was $399.5 million, reflecting a 12.9% increase from $353.9 million in Q1 2024[39] Revenue Breakdown - Retail automotive same-store revenue increased 2%, driven by a 4% increase in same-store service and parts revenue[4] - Total retail automotive revenue increased 1% to $6.6 billion, with total retail automotive gross profit rising 3% to $1.1 billion[6] - Retail automotive revenue increased by 1.4% to $6,569.3 million compared to $6,478.0 million in the prior year[22] - Total Revenue for Retail Automotive increased by 2.1% to $6,368.1 million, driven by a 7.2% increase in New Vehicles revenue to $2,923.3 million[29] - Retail Commercial Truck Operations saw a total revenue increase of 4.0% to $823.7 million, with New Vehicles revenue rising by 6.7% to $527.2 million[31] Vehicle Sales - New retail automotive units sold increased by 4.0% to 50,602 units, while used retail units decreased by 15.6% to 58,486 units[26] - Retail Automotive Same-Store Units for New Retail increased by 3.8% to 49,076, while Used Retail decreased by 10.6% to 57,175, resulting in a total retail decrease of 4.5% to 106,251 units[29] - Retail Commercial Truck Same-Store Units for New Retail decreased by 2.1% to 3,419, while Used Retail decreased by 9.1% to 954 units[33] Profitability Metrics - New vehicle gross profit per unit retailed declined by $87, while used vehicle gross profit per unit increased by $352 compared to Q4 2024[3] - Retail Automotive Same-Store Gross Profit rose by 2.6% to $1,053.4 million, with Service and Parts showing a significant increase of 6.3% to $450.2 million[29] - Retail Commercial Truck Same-Store Gross Profit fell by 7.6% to $133.2 million, with New Vehicles gross profit decreasing by 12.7% to $30.2 million[33] - Retail Automotive Same-Store Gross Margin remained stable at 16.5%, with Service and Parts showing an improvement of 120 basis points to 58.9%[29] - Retail Commercial Truck Gross Margin for New Vehicles decreased by 60 basis points to 6.4%, while Used Vehicles gross margin increased by 610 basis points to 11.4%[31] Shareholder Returns and Capital Management - The company repurchased 254,406 shares for approximately $39.9 million during the quarter, with an additional 495,570 shares repurchased for $71.2 million from April 1 to April 25, 2025[9] - Capital expenditures decreased to $76.6 million in Q1 2025 from $102.5 million in Q1 2024, while stock repurchases increased to $40.0 million from $32.9 million[35] Liquidity and Debt - As of March 31, 2025, the company had approximately $2.1 billion in liquidity, including $118 million in cash[9] - The leverage ratio at March 31, 2025, was 1.2x[9] - Cash and cash equivalents increased to $118.4 million from $72.4 million as of December 31, 2024[19] - Total Long-Term Debt decreased to $1,771.5 million as of March 31, 2025, from $1,852.0 million at December 31, 2024[36] - The Debt to Total Capitalization Ratio improved to 24.7% as of March 31, 2025, down from 26.2% at December 31, 2024[36] Inventory Management - New vehicle days' supply decreased to 39 days in Q1 2025 from 49 days in Q4 2024, indicating tighter inventory[36] Geographic Revenue Mix - The company’s North America revenue mix increased to 59.4% from 56.5% year-over-year, while the U.K. revenue mix decreased to 30.6% from 34.2%[22]

Core Insights - Penske Automotive (PAG) reported $7.6 billion in revenue for Q1 2025, a year-over-year increase of 2.1% and an EPS of $3.39 compared to $3.19 a year ago, exceeding Zacks Consensus Estimates for both revenue and EPS [1] Financial Performance - Revenue for Retail Automotive was $6.57 billion, slightly below the average estimate of $6.59 billion, reflecting a year-over-year change of +1.4% [4] - Revenue from New Vehicles in Retail Automotive was $3.02 billion, surpassing the average estimate of $2.99 billion, with a year-over-year increase of +7.8% [4] - Retail Commercial Truck revenue was reported at $823.70 million, slightly below the average estimate of $828.49 million, with a year-over-year change of +4% [4] - Revenue from Commercial Vehicle Distribution and Other was $211.50 million, exceeding the average estimate of $190.52 million, representing an 18.8% year-over-year increase [4] Market Performance - Penske's shares returned +7.7% over the past month, outperforming the Zacks S&P 500 composite, which saw a -0.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Group 1 - Penske Automotive reported quarterly earnings of $3.39 per share, exceeding the Zacks Consensus Estimate of $3.27 per share, and up from $3.19 per share a year ago, representing an earnings surprise of 3.67% [1] - The company achieved revenues of $7.6 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.14%, and an increase from $7.45 billion year-over-year [2] - Penske has outperformed the S&P 500, with shares increasing about 3.4% since the beginning of the year, while the S&P 500 has declined by 5.5% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is $3.55 on revenues of $7.91 billion, and for the current fiscal year, it is $13.80 on revenues of $30.7 billion [7] - The Automotive - Retail and Whole Sales industry, to which Penske belongs, is currently ranked in the top 20% of over 250 Zacks industries, indicating a favorable outlook for the sector [8]

Financial Performance - Revenue for Q1 2025 reached $7605 million, a 2% increase compared to $7448 million in Q1 2024 [22] - Net income attributable to common stockholders was $244 million, up 14% from $215 million in Q1 2024 [22] - Earnings per share increased by 14% to $366, compared to $321 in Q1 2024 [22] - Adjusted earnings per share increased by 6% to $339, compared to $321 in Q1 2024 [22] - Adjusted EBITDA for Q1 2025 was $3724 million, a 52% increase compared to $3539 million in Q1 2024 [69] Retail Automotive - Retail auto same-store revenue increased by 2% to $6368 million [22] - New vehicle price increased by 35% to $59202, while used vehicle price increased by 115% to $37624 [27] - Same-store new units volume increased by 4% to 49076, while used units volume decreased by 11% to 57175 [35] Capital Allocation and Liquidity - Returned $122 million to shareholders in Q1 2025, including $82 million in dividends and $40 million through share repurchases [28] - As of March 31, 2025, the company had $118 million in cash and $2 billion of availability under its credit agreements and mortgage facilities [27] - The company's leverage ratio was 12x as of March 31, 2025 [27] Penske Transportation Solutions (PTS) - PTS operating revenue remained relatively stable at $2703 million in Q1 2025 [58] - PTS net income increased by 3% to $115 million in Q1 2025 [58] - PAG recorded equity income from PTS investment of $332 million for the three months ended March 31, 2025 [61]

Investment Rating - The report assigns an "Overweight" (OW) rating to General Motors (GM) and Ford, while Tesla and Rivian are rated "Underweight" (UW) [6][7]. Core Insights - The automotive industry is experiencing varied performance metrics across different companies, with GM and Ford showing potential upside in their stock prices, while Tesla and Rivian face significant downside risks [6][7]. - The report highlights the importance of valuation metrics such as EV/EBITDA, P/E ratios, and sales growth projections for assessing investment opportunities within the automotive sector [6][22]. Global Auto OEMs Investment Comparables - General Motors (GM) has a current price of $44.57 with a market cap of $43.067 billion and a target price of $53.00, indicating a 19% upside potential [6]. - Ford (F) is priced at $9.63 with a market cap of $38.294 billion and a target price of $11.00, representing a 14% upside [6]. - Ferrari (RACE) is valued at $439.97 with a target price of $460.00, showing a 5% upside [6]. - Tesla (TSLA) is currently priced at $241.37 with a target price of $120.00, indicating a -50% downside [6]. - Rivian (RIVN) has a price of $11.60 with a target price of $11.00, reflecting a -5% downside [6]. Global Auto Parts Suppliers Valuation Metrics - The average EV/EBITDA for US auto parts suppliers is projected at 1.8x for 2024, with a corresponding EBITDA margin of 12% [22]. - Aptiv (APTV) is rated "Overweight" with a current price of $51.71 and a target price of $102, indicating a 97% upside [22]. - Borg Warner (BWA) is rated "Overweight" with a price of $26.45 and a target price of $46, representing a 74% upside [22]. - Lear Corp (LEA) is rated "Overweight" with a price of $79.42 and a target price of $140, indicating a 76% upside [22]. Performance Metrics - The report indicates that the average revenue CAGR for US auto parts suppliers is projected to be 2% from 2023 to 2025 [74]. - The EBITDA margin for US auto parts suppliers is expected to be around 12% in 2025, with some companies showing higher margins [74][83]. - The report also highlights the financial returns of various suppliers, with some companies achieving significant returns on invested capital (ROIC) [54][56].

Company Overview - Penske Automotive (PAG) is headquartered in Bloomfield Hills and operates in the Retail-Wholesale sector [3] - The stock has experienced a price change of -0.41% since the beginning of the year [3] Dividend Information - Penske Automotive currently pays a dividend of $1.22 per share, resulting in a dividend yield of 3.21%, significantly higher than the Automotive - Retail and Wholesale industry's yield of 0.25% and the S&P 500's yield of 1.69% [3] - The company's annualized dividend of $4.88 has increased by 19.3% from the previous year [4] - Over the past five years, Penske Automotive has raised its dividend five times, achieving an average annual increase of 30.89% [4] - The current payout ratio is 35%, indicating that the company pays out 35% of its trailing 12-month earnings per share as dividends [4] Earnings Growth Expectations - For the fiscal year, Penske Automotive anticipates solid earnings growth, with the Zacks Consensus Estimate for 2025 at $13.81 per share, reflecting a 0.51% increase from the previous year [5] Investment Considerations - Penske Automotive is viewed as a compelling investment opportunity due to its strong dividend performance and current Zacks Rank of 3 (Hold) [7]

Group 1 - Paralyzed Veterans of America (PVA) received a donation of $1.13 million from Penske Automotive Group, which includes contributions from customers, partners, and employees, as well as matching contributions from the company [1][2] - Since the partnership began in 2015, Penske Automotive Group and its stakeholders have contributed over $10 million to PVA, demonstrating a long-term commitment to supporting veterans with spinal cord injuries and diseases [2][3] - The funds will be utilized to provide veterans with the benefits they earned, specialized healthcare, and career opportunities, ensuring they can live independent and productive lives [1][2] Group 2 - PVA is a 501(c)(3) non-profit organization dedicated to serving veterans with spinal cord injuries or diseases, ensuring they receive the benefits earned through their service [4] - The organization also focuses on advocacy, monitoring care in VA spinal cord injury units, and funding research for improved care and potential cures for paralysis [4][5] - PVA operates more than 70 offices and 33 chapters across the United States, serving veterans, their families, and caregivers [5] Group 3 - Penske Automotive Group, headquartered in Bloomfield Hills, Michigan, is a diversified international transportation services company and a leading retailer of automotive and commercial trucks [6] - The company operates dealerships in multiple countries, including the United States, Canada, and several European and Asian nations, employing over 28,900 people worldwide [6] - Penske Automotive Group is a member of several major stock indices, including the S&P Mid Cap 400 and Fortune 500, indicating its significant presence in the market [6]

Company Overview - Penske Automotive (PAG) is headquartered in Bloomfield Hills and operates in the Retail-Wholesale sector, with a year-to-date price change of -2.66% [3] - The company currently pays a dividend of $1.22 per share, resulting in a dividend yield of 3.29%, significantly higher than the Automotive - Retail and Wholesale industry's yield of 0.26% and the S&P 500's yield of 1.57% [3] Dividend Performance - Penske Automotive's annualized dividend of $4.88 has increased by 19.3% compared to the previous year [4] - Over the past five years, the company has raised its dividend five times, achieving an average annual increase of 26.65% [4] - The current payout ratio stands at 35%, indicating that the company distributes 35% of its trailing 12-month earnings per share as dividends [4] Earnings Outlook - The Zacks Consensus Estimate projects earnings for fiscal year 2025 to be $13.78 per share, reflecting a 0.29% increase from the previous year [5] Investment Considerations - Penske Automotive is considered a strong dividend investment opportunity, particularly appealing to income investors due to its robust dividend yield and growth potential [7]