The recent de-rating in the Auto Dealerships sector is unwarranted and has created attractive entry point levels, JPMorgan analyst Rajat Gupta tells investors in a research note. The analyst views 2020 as another year of solid earnings growth with an estimated ~7% core operating earnings growth and ~13% overall earnings growth. Gupta expects the sector to re-rate higher from the standing ~45% discount versus the S&P. On stocks, the analyst would be favorably positioned on Lithia Motors (LAD) into the Q4 print. Gupta would avoid Asbury Automotive (ABG) into the Q4 results.

Reports Q1 revenue $8.56B, consensus $8.54B. New vehicle same store units grew by 3.6 %. Reports Q1 total vehicle gross profit per unit of $4,346, down $1,239. "In the first quarter, our teams responded as the industry continued to normalize inventories and profitability. We are committed to driving improvements across our business," said Bryan DeBoer, President and CEO. "Our model is diversified with our adjacencies maturing and on a path to profitability, as we continue to deliver the best experience for our customers. Responding to market conditions, we are rebalancing our capital allocation from acquisitions toward returns to our shareholders, with the long-term target of delivering $2 in EPS per billion in revenues."

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Get caught up quickly on the top news and calls moving stocks with these five Top Five lists.  1... To see the rest of the story go to thefly.com. See Story Here

Lithia Motors is readying to cut hundreds of positions following a collapse in the supply of used vehicles after the COVID-19 pandemic, the Financial Times' Peter Campbell reports, citing people with knowledge of the matter. Lithia, which acquired Pendragon dealerships and its used car marketplace CarStore this year, plans to shutter CarStore and cut about 250 jobs across the UK. Reference Link