Penske Automotive Acquires 6 Franchises In Italy; Shares Up
Zacks Investment Research | Oct 06, 2016 08:56AM ET
Penske Automotive Group, Inc.’s (NYSE:PAG) shares gained 0.17% to close at $48.46 on Oct 4, after the company announced the acquisition of six franchises in Bologna in northern Italy. Three of these are Porsche franchises, while the rest are Audi, Land Rover and Volvo franchises.
The acquisitions are part of the company’s plans to expand in Italy. They will double Penske Automotive’s business in the country.
Further, these acquisitions are expected to augment the company’s annual revenues by $200 million. They will also make Penske Automotive the largest BMW, Audi and Porsche dealer in Italy.
Penske Automotive aims to boost earnings by expanding its dealership network. In Jan 2016, it acquired a 49% equity ownership interest in the Nicole Group, a luxury dealership group that operates in Kanagawa and Tokyo, Japan. In Apr 2016, its subsidiary, Premier Truck Group acquired Harper Truck Centres, a Freightliner, Western Star, Thomas Built Bus and Fuso commercial truck dealership that operates in Ontario, Canada.
In Jul, 2016, Penske Automotive acquired an additional 14.4% interest in Penske Truck Leasing Co., L.P. (“PTL”), from subsidiaries of GE Capital Global Holdings, LLC, for $498.7 million. Post the acquisition, Penske Automotive holds a 23.4% ownership interest in PTL.
Penske Automotive carries a Zacks Rank #4 (Sell).
Stocks that Warrant a Look
Some better-ranked auto stocks include Cooper-Standard Holdings Inc. (NYSE:CPS) ,The Goodyear Tire & Rubber Company (NASDAQ:GT) and Motorcar Parts of America, Inc. (NASDAQ:MPAA) .
Cooper-Standard has witnessed positive estimate revisions in the last 60 days. It also posted positive earnings surprises in the last four quarters, resulting in an average beat of 51.17%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here .
Goodyear, a Zacks Rank #1 stock, has witnessed positive estimate revisions in the last 60 days. It also posted positive earnings surprises in the last four quarters, resulting in an average beat of 10.28%.
Motorcar Parts has seen its estimates move north in the last 60 days. The stock sports a Zacks Rank #1. The company has a long-term expected EPS growth rate of 23%, which is better than the industry average of 12.3%.
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