News About Banking Industry

Penske Automotive Group takes a rougher road for investors

Ever since Warren Buffett took an interest in auto dealer chains, more investors have been watching them as another way to cash in on booming auto sales. One analyst, however, notes that Penske Auto Group (PAG), the chain that is still headed by the auto racing legend Roger Penske, is taking a different route and is probably disappointed with its third-quarter earnings.

Analyst James Albertine of Stifel just wrote a note to investors in which he says he is standing by Penske over the long run. “We think PAG is more interested in building a Transportation Services company more so than a pure play auto retail portfolio, and we think PAG is probably the only company in this sector that could accomplish such a feat,” he writes. Still, it could be painfully long journey. He says he is slightly reducing his earnings-per-share estimates for fiscal 2015, 2016 and 2017.