NEW YORK, Oct 31 (Reuters) - Shares of Penske Automotive Group PAG.N should at least trade in range with peers, and could jump as much as 30 percent within a year, according to a report in Barron's financial newspaper.
The No. 2 U.S.-based auto dealership group posted a higher-than-expected quarterly profit earlier this month. [ID:nN22162973]. Yet its shares, which closed Friday at $13.45, continue to trade below rivals AutoNation Inc AN.N and CarMax Inc KMX.N.
The company, which is expected to earn $1.13 per share this year and $1.40 in 2011, should at least trade in range with those peers, Barron’s said in its Nov. 1 edition.
Some investors have been concerned about Penske’s exposure to Britain’s auto market, but Barron’s quoted one analyst who said the British business is Penske’s “crown jewel.”
Much of the company’s business is in luxury cars, which tend to be bought with cash and not on lucrative financing terms, denting Penske’s results, Barron’s said.
But to offset that, Penske’s has been pushing for a larger share of the high-margin auto service market, the newspaper said. (Reporting by Ernest Scheyder, editing by Maureen Bavdek)
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