Lithia Motors Inc. (NYSE:LAD) has acquired the assets of the Carbone Auto Group, a nine store platform based in New York and Vermont. Carbone is estimated to generate over $600 million in annual revenue through a strong exclusive market strategy. After optimizing the current franchises and operations, the group will consist of 13 stores: two stores each of Honda, Subaru and Ford and one store each of Toyota, Chevrolet, GMC Buick Cadillac, Chrysler Jeep Dodge Ram, Nissan, Hyundai and BMW. Carbone is estimated to provide approximately $0.20 to $0.25 in earnings per share in 2017.

The addition of the Carbone Auto Group provides a foundation from which Lithia plans to expand its exclusive market strategy throughout the Northeast. Combined with DCH Auto Group’s metropolitan market strategy, this further expands our growth potential across the United States.

Bryan DeBoer, President and Chief Executive Officer, commented, “We’re excited to welcome Enessa and Alex Carbone and the entire Carbone team to our family and look forward to sharing best practices to inspire continuous improvement. For over 85 years, Carbone has served their local communities in upstate New York. Their reputation and teams they have developed position them well for future growth. This adds to our growing pool of entrepreneurial and dynamic store leaders that accelerates our ability to find strong and stable businesses at a pace and return that is typically reserved for green-fielding.”

Lithia Equity Analysis

Lithia Motors Inc. (NYSE:LAD) opened trading today as $89.23 and is trading in the range of 84.40-89.99 today. Lithia’s current market cap stands at $2.25 billion.

Lithia is currently covered by 10 Wall Street analysts. The mean target price is $103.30 according to First Call. This presents a solid upside to the current price of the equity. The Mean Recommendation sits at 1.8 which is based on 4 Strong Buy, 4 Buy and 2 Hold ratings.

The most recent analyst actions consisted of Jefferies initiating the stock on April 11th

The current quarter EPS consensus estimate is 2.17 with revenue estimates of 2.25B. Sales are expected to grow at a 7.80% rate. Lithia reported actual earnings last quarter of 1.96 which beats the 1.93 consensus estimate, a 1.60% surprise.

Corporate Profile

Lithia Motors, Inc. operates as an automotive franchisee and retailer of new and used vehicles in the United States. The company sells new and used cars, and replacement parts; provides vehicle maintenance, warranty, paint, and repair services; and offers related financing; and sells service contracts, vehicle protection products, and credit insurance products. As of March 2, 2015, it offered 30 brands of new vehicles and various brands of used vehicles in 130 stores; and online through Lithia.com and DCHauto.com. The company was founded in 1946 and is headquartered in Medford, Oregon.

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