Morgan Stanley Cuts Ratings of Three Megadealers
Morgan Stanley cut its investment ratings Nov. 11 on auto retailers AutoNation Inc. and UnitedAuto Group Inc. to "underweight" from "equal-weight," and reduced Lithia Motors Inc. to "underweight" from "overweight," according to a Reuters report.
Analyst Vinay Shah, in a research note, cited concerns about the new-vehicle market and margins, according to Reuters.
Shah also cut the 2003 earnings estimate for UnitedAuto Group to $1.95 a share from $2.02. The analyst estimated that the stock might fall as low as $9 to $11 a share, Reuters said.
His estimates for both AutoNation and Lithia Motors, already below consensus and management guidance, were not changed. Shah estimated AutoNation's stock might fall as low as $8 to $9 a share, while Lithia Motors might decline to $14 to $15 a share, according to Reuters.
AutoNation shares closed Friday at $10.20, Lithia closed at $16.95, and UnitedAuto closed at $12.30, all on the New York Stock Exchange. All are near their 52-week lows, Reuters said.
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