DETROIT (Bloomberg) -- Penske Automotive Group Inc., Group 1 Automotive Inc., and Lithia Motors Inc. reached record prices after a KeyBanc Capital Markets report about the auto retailers cited a "confident" outlook on U.S. vehicle sales.
Penske gained 4.2 percent to $32.32 at the close in New York, the highest since its 1996 initial public offering.
Group 1, which began trading in 1997, increased 4.9 percent to $68.05. Lithia, which held its IPO in 1996, rose 2.7 percent to $42.09.
Brett Hoselton, a KeyBanc analyst in Cleveland, changed his ratings on Penske and Group 1 to buy from hold. He also reiterated a buy rating for Lithia while raising his price target to $46 from $41.
"We are incrementally more confident" about light-vehicle sales, KeyBanc said in a report in which Hoselton was the lead author. The sales have risen at least 10 percent in each of the past three years and, based on the average of 18 analysts’ estimates compiled by Bloomberg, may climb to 15.1 million this year from 14.5 million in 2012. Consumers are replacing cars and trucks that are, on average, the oldest ever on U.S. roads.
KeyBanc also said in the report that “we are now bullish on the acquisitions outlook” for the auto retailers.
Penske said in November and October that it bought dealerships in Wisconsin and California that will contribute about $255 million of annual revenue.
Group 1 said earlier this month that it acquired a Kia dealership in Kansas that it expects to generate about $65 million a year in sales, after disclosing the purchase of a Ford outlet in Georgia in December with expected annual revenue of $70 million.
