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1. Company Snapshot

1.a. Company Description

Penske Automotive Group, Inc., a diversified transportation services company, operates automotive and commercial truck dealerships.The company operates through four segments: Retail Automotive, Retail Commercial Truck, Other, and Non-Automotive Investments.It operates dealerships under franchise agreements with various automotive manufacturers and distributors.


The company engages in the sale of new and used motor vehicles, and related products and services comprise vehicle and collision repair services, as well as placement of finance and lease contracts, third-party insurance products, and other aftermarket products; and wholesale of parts.It also operates a heavy and medium duty truck dealership, which offers Freightliner and Western Star branded trucks, as well as a range of used trucks, and maintenance and repair services.In addition, it imports and distributes Western Star heavy-duty trucks, MAN heavy and medium duty trucks, buses, and Dennis Eagle refuse collection vehicles with associated parts in Australia, New Zealand, and portions of the Pacific.


Further, the company distributes diesel and gas engines, and power systems.The company operates 320 retail automotive franchises, including 146 franchises located in the United States and 174 franchises located outside of the United States; 23 CarShop used vehicle dealerships in the United States and the United Kingdom; and 37 commercial truck dealerships in Texas, Oklahoma, Tennessee, Georgia, Utah, Idaho, Kansas, Missouri, and Oregon, as well as Canada.Penske Automotive Group, Inc.


was incorporated in 1990 and is headquartered in Bloomfield Hills, Michigan.

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1.b. Last Insights on PAG

Penske Automotive Group's recent performance was driven by robust Q2 earnings, with a 4.7% jump in EPS to $3.78, surpassing analyst estimates. Record gross profit increased 3% to $1.3 billion, with same-store retail automotive gross profit up 3%. The company's service and parts business provided stability, driving 8% growth in retail automotive service and parts revenue. A 4.8% dividend increase to $1.32 per share and a share buyback of 630,000 shares during Q2 also contributed positively.

1.c. Company Highlights

2. Penske Automotive Group's Q3 2025 Earnings: A Mixed Bag

Penske Automotive Group reported revenue of $7.7 billion for Q3 2025, a 1% year-over-year increase. Net income was $213 million, with earnings per share (EPS) at $3.23, missing analyst estimates of $3.48. The company's retail automotive same-store revenue increased 5%, driven by a 5% increase in service and parts revenue. However, this was offset by challenges in the U.K. and commercial trucking businesses.

Publication Date: Nov -02

📋 Highlights
  • Revenue Growth:: Q3 revenue reached $7.7 billion, reflecting a 1% year-over-year increase.
  • Net Income:: Net income totaled $213 million, with earnings per share (EPS) at $3.23.
  • BEV Discount Impact:: A $7,100 discount from MSRP on BEV sales reduced new vehicle gross per unit by $100.
  • U.K. Challenges:: A cyber incident at Land Rover slashed total new gross per unit by $61 and raised SG&A costs by $5 million.
  • Cash Flow & Debt Reduction:: Generated $852 million in cash flow from operations, repaid $550 million in debt, and reduced leverage to 1.0x with 21.5% debt-to-capitalization.

Segment Performance

The U.S. retail automotive business was strong, with same-store new units delivered increasing 9% and revenue increasing $300 million. However, Premier Truck Group same-store unit sales declined 19% due to a challenging freight backdrop. In the U.K., a cyber incident at Land Rover impacted delivery of new vehicles, reducing total new gross per unit by approximately $61.

Operational Highlights

Used vehicle gross profit in the U.K. increased 19%, contributing to a 4% increase in used vehicle gross per unit. The company's service and parts business continued to perform well, with same-store performance up 3.5% in customer pay, 14% in warranty, and 7.5% in collision. As Roger Penske noted, "We're also seeing growth in body shop sales, both in the US and internationally, with a return on sales of 10-12%."

Cash Flow and Balance Sheet

The company generated $852 million in cash flow from operations and adjusted EBITDA was $1.1 billion for the 9 months ended September 30, 2025. The company repaid $550 million of senior subordinated notes and reduced non-vehicle long-term debt to $1.57 billion. Debt to total capitalization improved to 21.5% and leverage declined to 1.0x.

Valuation and Outlook

With a P/E Ratio of 11.19 and an EV/EBITDA of 8.42, the company's valuation appears reasonable. The Dividend Yield is 3.12%, indicating a relatively stable return for investors. Analysts estimate revenue growth of 2.0% for next year, which may be achievable given the company's strong service and parts business. However, the challenges in the U.K. and commercial trucking businesses may continue to impact results.

3. NewsRoom

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Mouser Electronics Announces Partnership with DS PENSKE for Formula E Season 12 with Debut in Brazil

Dec -04

Source: businesswire.com

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Top 10 High-Yield Dividend Stocks For December 2025

Dec -01

Source: seekingalpha.com

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The Presidio Group Exclusively Advised Penske Automotive Group on Sale of Hyundai of Noblesville to Gurley Leep Automotive Family

Nov -25

Source: businesswire.com

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Bahl & Gaynor Inc. Purchases 31,463 Shares of Penske Automotive Group, Inc. $PAG

Nov -23

Source: defenseworld.net

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PENSKE AUTOMOTIVE GROUP INCREASES PRESENCE IN CALIFORNIA AND TEXAS

Nov -19

Source: prnewswire.com

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Penske Automotive Group, Inc. (PAG) Presents at 49th Annual Automotive Symposium Transcript

Nov -04

Source: seekingalpha.com

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Top 10 High-Yield Dividend Stocks For November 2025

Nov -02

Source: seekingalpha.com

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Penske Q3 Earnings Miss Expectations, Revenues Rise Y/Y

Oct -31

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.55%)

6. Segments

Retail Automotive

Expected Growth: 4.5%

Penske Automotive Group's 4.5% retail automotive growth is driven by increasing demand for luxury vehicles, strategic brand acquisitions, and expansion into high-growth markets. Additionally, the company's focus on used car sales, online retailing, and customer retention programs contribute to its growth momentum.

Retail Commercial Truck

Expected Growth: 4.8%

Strong demand for e-commerce and last-mile delivery drives growth in retail commercial truck sales for Penske Automotive Group, Inc. Additionally, increasing construction and infrastructure projects boost demand for heavy-duty trucks. Furthermore, government incentives for fleet modernization and emission reduction contribute to the 4.8% growth rate.

Other

Expected Growth: 5.2%

Penske Automotive Group's 5.2% growth in 'Other' segment is driven by increased demand for its commercial vehicle rental business, expansion of its logistics and transportation services, and strategic acquisitions. Additionally, growth in its Australian and New Zealand markets, as well as increased sales of used trucks, contribute to this growth.

7. Detailed Products

New Vehicles

Penske Automotive Group, Inc. sells new vehicles from various manufacturers such as Toyota, Ford, and BMW through its dealerships.

Used Vehicles

The company offers a wide range of certified pre-owned and used vehicles from various manufacturers.

Parts and Accessories

Penske Automotive Group, Inc. sells original equipment manufacturer (OEM) parts and accessories for various vehicle brands.

Service and Repair

The company offers vehicle maintenance and repair services through its dealerships and service centers.

Commercial Vehicles

Penske Automotive Group, Inc. sells commercial vehicles, including trucks and vans, from various manufacturers.

Fleet Management

The company offers fleet management services, including vehicle leasing and management solutions.

Collision Repair

Penske Automotive Group, Inc. offers collision repair services through its dealerships and service centers.

8. Penske Automotive Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Penske Automotive Group, Inc. is medium due to the presence of alternative transportation options such as public transportation, ride-sharing, and car-sharing services.

Bargaining Power Of Customers

The bargaining power of customers for Penske Automotive Group, Inc. is low due to the lack of negotiating power of individual customers and the high switching costs.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Penske Automotive Group, Inc. is medium due to the presence of multiple suppliers and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants for Penske Automotive Group, Inc. is low due to the high barriers to entry, including high capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for Penske Automotive Group, Inc. is high due to the presence of multiple competitors in the automotive retail industry and the need to maintain market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 26.65%
Debt Cost 3.95%
Equity Weight 73.35%
Equity Cost 9.99%
WACC 8.38%
Leverage 36.33%

11. Quality Control: Penske Automotive Group, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Penske Automotive Group

A-Score: 6.5/10

Value: 6.9

Growth: 7.1

Quality: 4.8

Yield: 5.0

Momentum: 7.0

Volatility: 8.0

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Asbury Automotive Group

A-Score: 5.4/10

Value: 7.9

Growth: 7.4

Quality: 4.0

Yield: 0.0

Momentum: 7.0

Volatility: 6.0

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Group 1 Automotive

A-Score: 5.4/10

Value: 6.6

Growth: 7.8

Quality: 3.5

Yield: 0.0

Momentum: 8.0

Volatility: 6.3

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Lithia Motors

A-Score: 5.3/10

Value: 6.7

Growth: 6.7

Quality: 5.2

Yield: 1.0

Momentum: 6.0

Volatility: 6.0

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Rush Enterprises

A-Score: 5.2/10

Value: 6.6

Growth: 4.7

Quality: 4.7

Yield: 3.0

Momentum: 5.0

Volatility: 7.3

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ACV Auctions

A-Score: 3.4/10

Value: 6.5

Growth: 5.4

Quality: 4.4

Yield: 0.0

Momentum: 0.5

Volatility: 3.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

164.93$

Current Price

164.93$

Potential

-0.00%

Expected Cash-Flows