Penske Automotive Group, Inc.

PAG

Consumer CyclicalAuto - DealershipsNYSE

$173.81

Market Cap: $11.43B

Penske Automotive Group, Inc. (PAG) Valuation Summary

Updated May 9, 2026 13:10

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$131.03 – $1,787.16	$308.02	+77.2%
Growth Exit 10Y	$173.00 – $2,034.37	$373.62	+115.0%
EBITDA Exit 5Y	$77.33 – $342.11	$198.36	+14.1%
EBITDA Exit 10Y	$114.91 – $421.23	$244.61	+40.7%
▸ Trading Multiples
P/E	$173.71 – $268.16	$172.38	-0.8%
EV/EBITDA	$78.75 – $157.96	$98.35	-43.4%
EV/Revenue	$136.46 – $861.95	$307.45	+76.9%
▸ PEG
PEG Fair Value	$106.91 – $106.91	$106.91	-38.5%
▸ Earnings Power Value
Earnings Power Value	$73.95 – $202.57	$122.98	-29.2%
▸ Dividend Discount
Dividend Discount	$90.48 – $181.84	$127.69	-26.5%

Valuation History

DCF Analysis

Fair Value

$308.02

Market Price

$173.81

Upside / Downside

+77.2%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Penske Automotive Group, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 1.0% to 5.6% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 12, DPO 13, DIO 60). At a 6.3% WACC with mid-year discounting, the terminal value (80% of enterprise value) is derived from the Gordon Growth Model on Year 6 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $308.02 per share, suggesting PAG is undervalued by 77.2% at the current price of $173.81.

FCFF Present Value Calculation

WACC

6.31%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	1,508	1,558	1,573	1,662	1,755	1,799
(−) Net Interest	170	176	178	188	198	203
(+) D&A	320	339	354	351	354	363
EBITDA	1,998	2,074	2,105	2,201	2,307	2,365

(−) Tax	380	393	397	419	443	454
(−) CapEx	346	357	361	381	402	412
(−) ΔWC	-490	152	44	264	279	286
Free Cash Flow (FCFF)	1,762	1,172	1,303	1,137	1,183	1,213

Terminal Value						31,826
WACC / Discount Rate	6.3%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	1,709	1,069	1,119	918	898	23,437

Enterprise Value	29,149
Projection Period	5,712	19.6%
Terminal Value	23,437	80.4%

(−) Current Net Debt	8,758

Equity Value	20,391
(/) Outstanding Shares	66

Fair Price	$308.02

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
4.3%	$485	$600	$777	$1089	$1787
5.3%	$327	$383	$459	$568	$737
6.3%	$234	$267	$308	$361	$434
7.3%	$174	$195	$220	$251	$290
8.3%	$131	$145	$162	$182	$206

Current price: $173.81. Green = undervalued, Red = overvalued.

Fair Value

$373.62

Market Price

$173.81

Upside / Downside

+115.0%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Penske Automotive Group, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 1.0% to 3.4% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 12, DPO 13, DIO 60). At a 6.3% WACC with mid-year discounting, the terminal value (70% of enterprise value) is derived from the Gordon Growth Model on Year 11 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $373.62 per share, suggesting PAG is undervalued by 115.0% at the current price of $173.81.

FCFF Present Value Calculation

WACC

6.31%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	1,508	1,558	1,573	1,662	1,755	1,846	1,934	2,017	2,096	2,168	2,222
(−) Net Interest	170	176	178	188	198	208	218	228	237	245	251
(+) D&A	320	339	354	351	354	369	385	402	423	442	453
EBITDA	1,998	2,074	2,105	2,201	2,307	2,424	2,537	2,647	2,755	2,855	2,926

(−) Tax	380	393	397	419	443	466	488	509	529	547	560
(−) CapEx	346	357	361	381	402	423	443	463	480	497	509
(−) ΔWC	-490	152	44	264	279	272	262	249	233	215	220
Free Cash Flow (FCFF)	1,762	1,172	1,303	1,137	1,183	1,264	1,344	1,427	1,512	1,596	1,636

Terminal Value											42,931
WACC / Discount Rate	6.3%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	1,709	1,069	1,119	918	898	902	903	902	899	892	23,280

Enterprise Value	33,492
Projection Period	10,211	30.5%
Terminal Value	23,280	69.5%

(−) Current Net Debt	8,758

Equity Value	24,733
(/) Outstanding Shares	66

Fair Price	$373.62

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
4.3%	$613	$737	$931	$1272	$2034
5.3%	$415	$474	$553	$666	$842
6.3%	$301	$333	$374	$427	$499
7.3%	$226	$245	$269	$299	$336
8.3%	$173	$186	$201	$219	$241

Current price: $173.81. Green = undervalued, Red = overvalued.

Fair Value

$198.38

Market Price

$173.81

Upside / Downside

+14.1%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Penske Automotive Group, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 1.0% to 5.6% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 12, DPO 13, DIO 60). At a 6.3% WACC with mid-year discounting, the terminal value (74% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 9.3x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $198.36 per share, suggesting PAG is fairly valued by 14.1% at the current price of $173.81.

FCFF Present Value Calculation

WACC

6.31%

3% – 20%

EV/EBITDA Exit Multiple

9.29x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	1,508	1,558	1,573	1,662	1,755	1,799
(−) Net Interest	170	176	178	188	198	203
(+) D&A	320	339	354	351	354	363
EBITDA	1,998	2,074	2,105	2,201	2,307	2,365

(−) Tax	380	393	397	419	443	—
(−) CapEx	346	357	361	381	402	—
(−) ΔWC	-490	152	44	264	279	—
Free Cash Flow (FCF)	1,762	1,172	1,303	1,137	1,183	—

Peers' EBITDA Multiple						9.3x
Terminal Value						21,970
WACC / Discount Rate	6.31%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	1,709	1,069	1,119	918	898	16,178

Enterprise Value	21,890
Projection Period	5,712	26.1%
Terminal Value	16,178	73.9%

(−) Current Net Debt	8,758
Equity Value	13,132
(÷) Outstanding Shares	66M
Fair Price	$198	+14.1%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	5.3x	7.3x	9.3x	11.3x	13.3x
4.3%	$111	$169	$226	$284	$342
5.3%	$102	$157	$212	$267	$322
6.3%	$93	$146	$198	$251	$304
7.3%	$85	$135	$185	$236	$286
8.3%	$77	$125	$173	$221	$269

Current price: $173.81. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$244.62

Market Price

$173.81

Upside / Downside

+40.7%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Penske Automotive Group, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 1.0% to 3.4% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 12, DPO 13, DIO 60). At a 6.3% WACC with mid-year discounting, the terminal value (59% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 9.3x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $244.61 per share, suggesting PAG is undervalued by 40.7% at the current price of $173.81.

FCFF Present Value Calculation

WACC

6.31%

3% – 20%

EV/EBITDA Exit Multiple

9.29x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	1,508	1,558	1,573	1,662	1,755	1,846	1,934	2,017	2,096	2,168	2,222
(−) Net Interest	170	176	178	188	198	208	218	228	237	245	251
(+) D&A	320	339	354	351	354	369	385	402	423	442	453
EBITDA	1,998	2,074	2,105	2,201	2,307	2,424	2,537	2,647	2,755	2,855	2,926

(−) Tax	380	393	397	419	443	466	488	509	529	547	—
(−) CapEx	346	357	361	381	402	423	443	463	480	497	—
(−) ΔWC	-490	152	44	264	279	272	262	249	233	215	—
Free Cash Flow (FCF)	1,762	1,172	1,303	1,137	1,183	1,264	1,344	1,427	1,512	1,596	—

Peers' EBITDA Multiple											9.3x
Terminal Value											27,183
WACC / Discount Rate	6.31%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	1,709	1,069	1,119	918	898	902	903	902	899	892	14,741

Enterprise Value	24,952
Projection Period	10,211	40.9%
Terminal Value	14,741	59.1%

(−) Current Net Debt	8,758
Equity Value	16,194
(÷) Outstanding Shares	66M
Fair Price	$245	+40.7%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	5.3x	7.3x	9.3x	11.3x	13.3x
4.3%	$189	$247	$305	$363	$421
5.3%	$168	$221	$273	$326	$379
6.3%	$149	$197	$245	$293	$340
7.3%	$131	$175	$218	$262	$306
8.3%	$115	$155	$194	$234	$274

Current price: $173.81. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$172.38

Market Price

$173.81

Upside / Downside

-0.8%

Verdict

Overvalued

Using the industry peer median P/E Multiples multiple (trailing + forward), Penske Automotive Group, Inc. (PAG) has a fair value of $172.38 based on 9 comparable companies in the Auto - Dealerships industry.

P/E Valuation — Auto - Dealerships

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
Penske Automotive Group, Inc.PAG	11,506	12.3x	12.9x
Crown Holdings, Inc.CCK	11,308	15.9x	16.0x
Texas Roadhouse, Inc.TXRH	10,412	25.9x	25.1x
Autoliv, Inc.ALV	9,105	12.7x	11.6x
Norwegian Cruise Line Holdings Ltd.NCLH	7,842	19.0x	8.2x
LKQ CorporationLKQ	7,361	12.3x	9.3x
AutoNation, Inc.AN	6,900	12.1x	9.6x
Lithia Motors, Inc.LAD	6,705	9.1x	8.6x
CarMax, Inc.KMX	5,721	24.0x	12.3x
Group 1 Automotive, Inc.GPI	4,258	14.2x	8.5x
Industry Median		14.2x	9.6x
(*) Profit after tax		935	894
Equity Value		13,325	9,498
(/) Outstanding shares		66	66
Fair Price		$201	$143

Selected Fair Value (avg of trailing + forward)

$172.38

-0.8%

Fair Value

$98.35

Market Price

$173.81

Upside / Downside

-43.4%

Verdict

Overvalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), Penske Automotive Group, Inc. (PAG) has a fair value of $98.35 based on 10 comparable companies in the Auto - Dealerships industry.

EV/EBITDA Valuation — Auto - Dealerships

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
Penske Automotive Group, Inc.PAG	11,506	11.9x	12.5x
Crown Holdings, Inc.CCK	11,308	8.2x	8.6x
Texas Roadhouse, Inc.TXRH	10,412	17.7x	15.9x
Autoliv, Inc.ALV	9,105	7.3x	7.1x
Norwegian Cruise Line Holdings Ltd.NCLH	7,842	8.1x	8.0x
Mobileye Global Inc.MBLY	7,484	40.3x	38.6x
LKQ CorporationLKQ	7,361	8.3x	8.4x
AutoNation, Inc.AN	6,900	11.3x	11.2x
Lithia Motors, Inc.LAD	6,705	9.1x	8.9x
CarMax, Inc.KMX	5,721	10.9x	10.7x
Group 1 Automotive, Inc.GPI	4,258	9.4x	9.3x
Industry Median		9.3x	9.1x
(*) EBITDA		1,698	1,617
= Enterprise Value		15,775	14,763
(-) Net Debt		8,758	8,758
Equity Value		7,017	6,004
(/) Outstanding shares		66	66
Fair Price		$106	$91

Selected Fair Value (avg of trailing + forward)

$98.35

-43.4%

Fair Value

$307.45

Market Price

$173.81

Upside / Downside

+76.9%

Verdict

Undervalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Penske Automotive Group, Inc. (PAG) has a fair value of $307.45 based on 10 comparable companies in the Auto - Dealerships industry.

EV/Revenue Valuation — Auto - Dealerships

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Penske Automotive Group, Inc.PAG	11,506	0.6x	0.7x
Crown Holdings, Inc.CCK	11,308	1.3x	1.4x
Texas Roadhouse, Inc.TXRH	10,412	2.1x	1.9x
Autoliv, Inc.ALV	9,105	1.0x	1.0x
Norwegian Cruise Line Holdings Ltd.NCLH	7,842	2.3x	2.2x
Mobileye Global Inc.MBLY	7,484	3.0x	2.9x
LKQ CorporationLKQ	7,361	0.9x	0.9x
AutoNation, Inc.AN	6,900	0.6x	0.6x
Lithia Motors, Inc.LAD	6,705	0.6x	0.5x
CarMax, Inc.KMX	5,721	0.3x	0.3x
Group 1 Automotive, Inc.GPI	4,258	0.4x	0.4x
Industry Median		0.9x	0.9x
(*) Revenue		31,809	30,291
= Enterprise Value		29,921	28,301
(-) Net Debt		8,758	8,758
Equity Value		21,163	19,543
(/) Outstanding shares		66	66
Fair Price		$320	$295

Selected Fair Value (avg of trailing + forward)

$307.45

+76.9%

PEG Fair Value

Fair Value

$106.91

Market Price

$173.81

Upside / Downside

-38.5%

Verdict

Overvalued

Using the PEG framework with analyst consensus forward EPS growth of 8.0% plus 3.0% dividend yield, the company has a fair value of $106.91 based on NTM EPS (FY2026) of $13.36. The current PEG ratio is 2.46.

PEG Ratio

2.46Expensive

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 13.0 ÷ (2.3% + 3.0%) = 2.46

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: Slow GrowerPEG less reliable

PEG tends to undervalue slow growers — consider dividend yield and asset value instead.

Fair Value Calculation

EPS Growth RateForward	2.3%
Dividend Yield	+3.0%
Adjusted Growth (clamped 8–25%)Clamped	8.0%
Fair P/E	8.0x
NTM EPS (FY2026)	$13.36
Fair Value	$106.91

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2025 (actual)	$14.13	—	—
FY2026E	$13.36	-5.4%	7
FY2027E	$14.34	+7.3%	7
FY2028E	$15.12	+5.4%	3

3Y Forward EPS CAGR: 2.3%

Historical Growth

Year	Net Income	EPS	YoY
FY2021	$1.2B	$14.89	—
FY2022	$1.4B	$18.55	+24.6%
FY2023	$1.1B	$15.50	-16.4%
FY2024	$968.9M	$14.49	-6.5%
FY2025	$935.4M	$14.13	-2.5%

4Y Historical EPS CAGR: -1.3%

Earnings Power Value

Fair Value

$122.98

Market Price

$173.81

Upside / Downside

-29.2%

Verdict

Overvalued

Using the Earnings Power Value framework with a WACC of 6.3% and normalized earnings of $1.1B, the company has a fair value of $122.98 per share. The EPV range is $73.95 – $202.57 based on WACC sensitivity (4.8% – 7.8%).

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	1,066	1,066	1,066
(/) WACC	7.8%	6.3%	4.8%
Enterprise Value	13,654	16,899	22,168
(-) Net debt	8,758	8,758	8,758
Equity Value	4,896	8,141	13,410
(/) Outstanding shares	66	66	66
Fair Price	$73.95	$122.98	$202.57

Dividend Discount Model

Fair Value

$127.69

Market Price

$173.81

Upside / Downside

-26.5%

Verdict

Overvalued

Using the Two-Stage Dividend Discount Model with a Cost of Equity of 9.5% and projected dividend growth of 15.0%, the fair value is $127.69 per share. The DDM range is $90.48 – $181.84 based on sensitivity analysis across Cost of Equity and growth rate assumptions.

Dividend Profile

Current DPS

$5.19

Dividend Yield

3.01%

Payout Ratio

36.8%

Dividend Coverage

2.72x

FCF Payout Ratio46.4%

DPS CAGR (4Y)30.6%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2025	$5.19	36.8%	+26.6%
2024	$4.10	28.3%	+47.5%
2023	$2.78	17.1%	+34.3%
2022	$2.07	11.2%	+15.9%
2021	$1.79	12.0%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2026	$5.97	15.0%	0.9134	$5.46
2027	$6.87	15.0%	0.8343	$5.73
2028	$7.90	15.0%	0.7621	$6.02
2029	$9.08	15.0%	0.6961	$6.32
2030	$10.45	15.0%	0.6358	$6.64
Terminal Value	$10.71 DPS	2.5%		$97.52

PV of Projected Dividends$30.17

PV of Terminal Value$97.52

Fair Value per Share$127.69

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	13.0%	14.0%	15.0%	15.0%	15.0%
7.5%	$168	$175	$182	$182	$182
8.5%	$139	$144	$150	$150	$150
9.5%	$118	$123	$128	$128	$128
10.5%	$102	$107	$111	$111	$111
11.5%	$90	$94	$98	$98	$98

Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.

Penske Automotive Group, Inc. (PAG) Valuation Summary

Updated May 9, 2026 13:10

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$131.03 – $1,787.16	$308.02	+77.2%
Growth Exit 10Y	$173.00 – $2,034.37	$373.62	+115.0%
EBITDA Exit 5Y	$77.33 – $342.11	$198.36	+14.1%
EBITDA Exit 10Y	$114.91 – $421.23	$244.61	+40.7%
▸ Trading Multiples
P/E	$173.71 – $268.16	$172.38	-0.8%
EV/EBITDA	$78.75 – $157.96	$98.35	-43.4%
EV/Revenue	$136.46 – $861.95	$307.45	+76.9%
▸ PEG
PEG Fair Value	$106.91 – $106.91	$106.91	-38.5%
▸ Earnings Power Value
Earnings Power Value	$73.95 – $202.57	$122.98	-29.2%
▸ Dividend Discount
Dividend Discount	$90.48 – $181.84	$127.69	-26.5%

Valuation History

DCF Analysis

Fair Value

$308.02

Market Price

$173.81

Upside / Downside

+77.2%

Verdict

Undervalued

FCFF Present Value Calculation

WACC

6.31%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	1,508	1,558	1,573	1,662	1,755	1,799
(−) Net Interest	170	176	178	188	198	203
(+) D&A	320	339	354	351	354	363
EBITDA	1,998	2,074	2,105	2,201	2,307	2,365

(−) Tax	380	393	397	419	443	454
(−) CapEx	346	357	361	381	402	412
(−) ΔWC	-490	152	44	264	279	286
Free Cash Flow (FCFF)	1,762	1,172	1,303	1,137	1,183	1,213

Terminal Value						31,826
WACC / Discount Rate	6.3%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	1,709	1,069	1,119	918	898	23,437

Enterprise Value	29,149
Projection Period	5,712	19.6%
Terminal Value	23,437	80.4%

(−) Current Net Debt	8,758

Equity Value	20,391
(/) Outstanding Shares	66

Fair Price	$308.02

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
4.3%	$485	$600	$777	$1089	$1787
5.3%	$327	$383	$459	$568	$737
6.3%	$234	$267	$308	$361	$434
7.3%	$174	$195	$220	$251	$290
8.3%	$131	$145	$162	$182	$206

Current price: $173.81. Green = undervalued, Red = overvalued.

Fair Value

$373.62

Market Price

$173.81

Upside / Downside

+115.0%

Verdict

Undervalued

FCFF Present Value Calculation

WACC

6.31%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	1,508	1,558	1,573	1,662	1,755	1,846	1,934	2,017	2,096	2,168	2,222
(−) Net Interest	170	176	178	188	198	208	218	228	237	245	251
(+) D&A	320	339	354	351	354	369	385	402	423	442	453
EBITDA	1,998	2,074	2,105	2,201	2,307	2,424	2,537	2,647	2,755	2,855	2,926

(−) Tax	380	393	397	419	443	466	488	509	529	547	560
(−) CapEx	346	357	361	381	402	423	443	463	480	497	509
(−) ΔWC	-490	152	44	264	279	272	262	249	233	215	220
Free Cash Flow (FCFF)	1,762	1,172	1,303	1,137	1,183	1,264	1,344	1,427	1,512	1,596	1,636

Terminal Value											42,931
WACC / Discount Rate	6.3%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	1,709	1,069	1,119	918	898	902	903	902	899	892	23,280

Enterprise Value	33,492
Projection Period	10,211	30.5%
Terminal Value	23,280	69.5%

(−) Current Net Debt	8,758

Equity Value	24,733
(/) Outstanding Shares	66

Fair Price	$373.62

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
4.3%	$613	$737	$931	$1272	$2034
5.3%	$415	$474	$553	$666	$842
6.3%	$301	$333	$374	$427	$499
7.3%	$226	$245	$269	$299	$336
8.3%	$173	$186	$201	$219	$241

Current price: $173.81. Green = undervalued, Red = overvalued.

Fair Value

$198.38

Market Price

$173.81

Upside / Downside

+14.1%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Penske Automotive Group, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 1.0% to 5.6% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 12, DPO 13, DIO 60). At a 6.3% WACC with mid-year discounting, the terminal value (74% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 9.3x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $198.36 per share, suggesting PAG is fairly valued by 14.1% at the current price of $173.81.

FCFF Present Value Calculation

WACC

6.31%

3% – 20%

EV/EBITDA Exit Multiple

9.29x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	1,508	1,558	1,573	1,662	1,755	1,799
(−) Net Interest	170	176	178	188	198	203
(+) D&A	320	339	354	351	354	363
EBITDA	1,998	2,074	2,105	2,201	2,307	2,365

(−) Tax	380	393	397	419	443	—
(−) CapEx	346	357	361	381	402	—
(−) ΔWC	-490	152	44	264	279	—
Free Cash Flow (FCF)	1,762	1,172	1,303	1,137	1,183	—

Peers' EBITDA Multiple						9.3x
Terminal Value						21,970
WACC / Discount Rate	6.31%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	1,709	1,069	1,119	918	898	16,178

Enterprise Value	21,890
Projection Period	5,712	26.1%
Terminal Value	16,178	73.9%

(−) Current Net Debt	8,758
Equity Value	13,132
(÷) Outstanding Shares	66M
Fair Price	$198	+14.1%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	5.3x	7.3x	9.3x	11.3x	13.3x
4.3%	$111	$169	$226	$284	$342
5.3%	$102	$157	$212	$267	$322
6.3%	$93	$146	$198	$251	$304
7.3%	$85	$135	$185	$236	$286
8.3%	$77	$125	$173	$221	$269

Current price: $173.81. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$244.62

Market Price

$173.81

Upside / Downside

+40.7%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Penske Automotive Group, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 1.0% to 3.4% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 12, DPO 13, DIO 60). At a 6.3% WACC with mid-year discounting, the terminal value (59% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 9.3x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $244.61 per share, suggesting PAG is undervalued by 40.7% at the current price of $173.81.

FCFF Present Value Calculation

WACC

6.31%

3% – 20%

EV/EBITDA Exit Multiple

9.29x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	1,508	1,558	1,573	1,662	1,755	1,846	1,934	2,017	2,096	2,168	2,222
(−) Net Interest	170	176	178	188	198	208	218	228	237	245	251
(+) D&A	320	339	354	351	354	369	385	402	423	442	453
EBITDA	1,998	2,074	2,105	2,201	2,307	2,424	2,537	2,647	2,755	2,855	2,926

(−) Tax	380	393	397	419	443	466	488	509	529	547	—
(−) CapEx	346	357	361	381	402	423	443	463	480	497	—
(−) ΔWC	-490	152	44	264	279	272	262	249	233	215	—
Free Cash Flow (FCF)	1,762	1,172	1,303	1,137	1,183	1,264	1,344	1,427	1,512	1,596	—

Peers' EBITDA Multiple											9.3x
Terminal Value											27,183
WACC / Discount Rate	6.31%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	1,709	1,069	1,119	918	898	902	903	902	899	892	14,741

Enterprise Value	24,952
Projection Period	10,211	40.9%
Terminal Value	14,741	59.1%

(−) Current Net Debt	8,758
Equity Value	16,194
(÷) Outstanding Shares	66M
Fair Price	$245	+40.7%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	5.3x	7.3x	9.3x	11.3x	13.3x
4.3%	$189	$247	$305	$363	$421
5.3%	$168	$221	$273	$326	$379
6.3%	$149	$197	$245	$293	$340
7.3%	$131	$175	$218	$262	$306
8.3%	$115	$155	$194	$234	$274

Current price: $173.81. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$172.38

Market Price

$173.81

Upside / Downside

-0.8%

Verdict

Overvalued

P/E Valuation — Auto - Dealerships

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
Penske Automotive Group, Inc.PAG	11,506	12.3x	12.9x
Crown Holdings, Inc.CCK	11,308	15.9x	16.0x
Texas Roadhouse, Inc.TXRH	10,412	25.9x	25.1x
Autoliv, Inc.ALV	9,105	12.7x	11.6x
Norwegian Cruise Line Holdings Ltd.NCLH	7,842	19.0x	8.2x
LKQ CorporationLKQ	7,361	12.3x	9.3x
AutoNation, Inc.AN	6,900	12.1x	9.6x
Lithia Motors, Inc.LAD	6,705	9.1x	8.6x
CarMax, Inc.KMX	5,721	24.0x	12.3x
Group 1 Automotive, Inc.GPI	4,258	14.2x	8.5x
Industry Median		14.2x	9.6x
(*) Profit after tax		935	894
Equity Value		13,325	9,498
(/) Outstanding shares		66	66
Fair Price		$201	$143

Selected Fair Value (avg of trailing + forward)

$172.38

-0.8%

Fair Value

$98.35

Market Price

$173.81

Upside / Downside

-43.4%

Verdict

Overvalued

EV/EBITDA Valuation — Auto - Dealerships

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
Penske Automotive Group, Inc.PAG	11,506	11.9x	12.5x
Crown Holdings, Inc.CCK	11,308	8.2x	8.6x
Texas Roadhouse, Inc.TXRH	10,412	17.7x	15.9x
Autoliv, Inc.ALV	9,105	7.3x	7.1x
Norwegian Cruise Line Holdings Ltd.NCLH	7,842	8.1x	8.0x
Mobileye Global Inc.MBLY	7,484	40.3x	38.6x
LKQ CorporationLKQ	7,361	8.3x	8.4x
AutoNation, Inc.AN	6,900	11.3x	11.2x
Lithia Motors, Inc.LAD	6,705	9.1x	8.9x
CarMax, Inc.KMX	5,721	10.9x	10.7x
Group 1 Automotive, Inc.GPI	4,258	9.4x	9.3x
Industry Median		9.3x	9.1x
(*) EBITDA		1,698	1,617
= Enterprise Value		15,775	14,763
(-) Net Debt		8,758	8,758
Equity Value		7,017	6,004
(/) Outstanding shares		66	66
Fair Price		$106	$91

Selected Fair Value (avg of trailing + forward)

$98.35

-43.4%

Fair Value

$307.45

Market Price

$173.81

Upside / Downside

+76.9%

Verdict

Undervalued

EV/Revenue Valuation — Auto - Dealerships

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Penske Automotive Group, Inc.PAG	11,506	0.6x	0.7x
Crown Holdings, Inc.CCK	11,308	1.3x	1.4x
Texas Roadhouse, Inc.TXRH	10,412	2.1x	1.9x
Autoliv, Inc.ALV	9,105	1.0x	1.0x
Norwegian Cruise Line Holdings Ltd.NCLH	7,842	2.3x	2.2x
Mobileye Global Inc.MBLY	7,484	3.0x	2.9x
LKQ CorporationLKQ	7,361	0.9x	0.9x
AutoNation, Inc.AN	6,900	0.6x	0.6x
Lithia Motors, Inc.LAD	6,705	0.6x	0.5x
CarMax, Inc.KMX	5,721	0.3x	0.3x
Group 1 Automotive, Inc.GPI	4,258	0.4x	0.4x
Industry Median		0.9x	0.9x
(*) Revenue		31,809	30,291
= Enterprise Value		29,921	28,301
(-) Net Debt		8,758	8,758
Equity Value		21,163	19,543
(/) Outstanding shares		66	66
Fair Price		$320	$295

Selected Fair Value (avg of trailing + forward)

$307.45

+76.9%

PEG Fair Value

Fair Value

$106.91

Market Price

$173.81

Upside / Downside

-38.5%

Verdict

Overvalued

PEG Ratio

2.46Expensive

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 13.0 ÷ (2.3% + 3.0%) = 2.46

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: Slow GrowerPEG less reliable

PEG tends to undervalue slow growers — consider dividend yield and asset value instead.

Fair Value Calculation

EPS Growth RateForward	2.3%
Dividend Yield	+3.0%
Adjusted Growth (clamped 8–25%)Clamped	8.0%
Fair P/E	8.0x
NTM EPS (FY2026)	$13.36
Fair Value	$106.91

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2025 (actual)	$14.13	—	—
FY2026E	$13.36	-5.4%	7
FY2027E	$14.34	+7.3%	7
FY2028E	$15.12	+5.4%	3

3Y Forward EPS CAGR: 2.3%

Historical Growth

Year	Net Income	EPS	YoY
FY2021	$1.2B	$14.89	—
FY2022	$1.4B	$18.55	+24.6%
FY2023	$1.1B	$15.50	-16.4%
FY2024	$968.9M	$14.49	-6.5%
FY2025	$935.4M	$14.13	-2.5%

4Y Historical EPS CAGR: -1.3%

Earnings Power Value

Fair Value

$122.98

Market Price

$173.81

Upside / Downside

-29.2%

Verdict

Overvalued

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	1,066	1,066	1,066
(/) WACC	7.8%	6.3%	4.8%
Enterprise Value	13,654	16,899	22,168
(-) Net debt	8,758	8,758	8,758
Equity Value	4,896	8,141	13,410
(/) Outstanding shares	66	66	66
Fair Price	$73.95	$122.98	$202.57

Dividend Discount Model

Fair Value

$127.69

Market Price

$173.81

Upside / Downside

-26.5%

Verdict

Overvalued

Dividend Profile

Current DPS

$5.19

Dividend Yield

3.01%

Payout Ratio

36.8%

Dividend Coverage

2.72x

FCF Payout Ratio46.4%

DPS CAGR (4Y)30.6%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2025	$5.19	36.8%	+26.6%
2024	$4.10	28.3%	+47.5%
2023	$2.78	17.1%	+34.3%
2022	$2.07	11.2%	+15.9%
2021	$1.79	12.0%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2026	$5.97	15.0%	0.9134	$5.46
2027	$6.87	15.0%	0.8343	$5.73
2028	$7.90	15.0%	0.7621	$6.02
2029	$9.08	15.0%	0.6961	$6.32
2030	$10.45	15.0%	0.6358	$6.64
Terminal Value	$10.71 DPS	2.5%		$97.52

PV of Projected Dividends$30.17

PV of Terminal Value$97.52

Fair Value per Share$127.69

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	13.0%	14.0%	15.0%	15.0%	15.0%
7.5%	$168	$175	$182	$182	$182
8.5%	$139	$144	$150	$150	$150
9.5%	$118	$123	$128	$128	$128
10.5%	$102	$107	$111	$111	$111
11.5%	$90	$94	$98	$98	$98