Thursday, June 12, 2008
Car dealer share prices take a hit
Pendragon, Inchcape and Lookers all record a dip
Car dealers are starting to feel the impact of the credit crunch, with shares in a number of major groups dropping.
Large motor retailers to take a hit include Inchcape, which saw its share price fall 33p, and Lookers, which recorded a 13p drop.
Vertu Motors remained flat at 44p but Pendragon, despite predicting in April that full-year results would be at the upper end of expectations, saw its share price fall 2½ p to 25¾ p.
The decline has arrived after the group’s joint house brokers Citigroup and Arden Partners cut their earnings estimates by around 20 per cent.
Michael Vassallo, equities analyst at stockbroker Brewin Dolphin, said the development was unusual, as house brokers typically took their cues from the companies.
“Usually they would downgrade based on a company saying something,” he said.
“But Pendragon hasn’t said anything – the last thing it said was that they were doing very well.”
Vassallo said the cautious approach was not specific to the motor retail sector, however.
“I think Citigroup has taken a more negative stance on the whole of the retail sector, it’s not just motor retailers,” he said.
“So it’s really about consumer weakness – that’s what they’ve blamed it on.”
DATED: 12.06.08
FEED: MT
Car dealers are starting to feel the impact of the credit crunch, with shares in a number of major groups dropping.
Large motor retailers to take a hit include Inchcape, which saw its share price fall 33p, and Lookers, which recorded a 13p drop.
Vertu Motors remained flat at 44p but Pendragon, despite predicting in April that full-year results would be at the upper end of expectations, saw its share price fall 2½ p to 25¾ p.
The decline has arrived after the group’s joint house brokers Citigroup and Arden Partners cut their earnings estimates by around 20 per cent.
Michael Vassallo, equities analyst at stockbroker Brewin Dolphin, said the development was unusual, as house brokers typically took their cues from the companies.
“Usually they would downgrade based on a company saying something,” he said.
“But Pendragon hasn’t said anything – the last thing it said was that they were doing very well.”
Vassallo said the cautious approach was not specific to the motor retail sector, however.
“I think Citigroup has taken a more negative stance on the whole of the retail sector, it’s not just motor retailers,” he said.
“So it’s really about consumer weakness – that’s what they’ve blamed it on.”
DATED: 12.06.08
FEED: MT
