Penske Automotive Group, Inc. PAG reported that it has closed the acquisition of The Car People. The acquired company is a U.K.-based retailer of good quality used vehicles at fixed prices.
Annually, The Car People sells approximately 18,000 vehicles and is expected to earn annualized revenues of roughly $300 million.
Per management, purchase of The Car People will help Penske Automotive develop its used car business segment and reinforce its position in the United Kingdom, the company’s second largest market.
Penske Automotive Group, Inc. Price and Consensus
Now that the transaction is complete, the combined entity in the used car supermarket business in the country is expected to sell more than 55,000 vehicles per annum.
Additionally, on an annualized basis, Penske Automotive projects earnings growth of around 5-7 cents per share.
Notably, at the start of last year, the company had also acquired CarShop and CarSense in February and January, respectively. The former is one of the leading retailers of used vehicles in the United Kingdom while the latter is a specialty retailer of used vehicles in the United States. Both acquisitions were realized in order to diversify Penske Automotive’s business and expand its market.
Price Performance
Shares of Penske Automotive have slipped 0.1% over a month, outperforming the 4.7% decline of the industry it belongs to.
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Zacks Rank & Key Picks
Penske Automotive carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Toyota Motor Corporation TM, Gentex Corporation GNTX and Volkswagen AG VLKAY. While Toyota sports a Zacks Rank #1 (Strong Buy), Gentex and Volkswagen carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Toyota has an expected long-term growth rate of 6.2%. Over a month, shares of the company have gained 5.2%.
Gentex has an expected long-term growth rate of 9.7%. In the last three months, shares of the company have climbed 4.9%.
Volkswagen has an expected long-term growth rate of 12.9%. In the last three months, shares of the company have rallied 18.7%.
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