07:25 AM EDT, 04/24/2024 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We lower our 12-month target by $30 to $270, based on a '25 P/E of 7.0x, a justified discount to LAD's 5-year mean forward P/E of 10.3x. We lower our adjusted EPS estimates to $32.50 from $37.15 for '24 and to $38.50 from $43.00 for '25. LAD posts Q1 adjusted EPS of $6.11 vs. $8.44 (-28%), well short of the $7.98 consensus. The miss was driven primarily by weaker-than-expected margins, as revenue rose 23% to $8.56B ($10M below consensus) and gross margin contracted 180 bps to 15.6% (30 bps below consensus). Volumes were up a solid 26% for new vehicles and 31% for used vehicles, while pricing was down 3.1% for new and 4.1% for used vehicles. Importantly, the revenue and volume growth was largely driven by acquisitions, as same store revenue growth was down 1.9%. We maintain a Hold opinion. With auto inventories having normalized from historically low levels and a higher-for-longer interest rate scenario unfolding, we think caution is warranted and see better opportunities across auto retail.