Morgan Stanley downgrades Lithia Motors (LAD) to equal-weight from overweight.
Analyst Stephen Girsky says he is downgrading Lithia as he is less convinced that high Chrysler exposure will aid sales meaningfully.
He notes his valuation has increased significantly in the past five months and risk/reward looks less favorable. Aside from these points, he says Lithia posted solid fourth-quarter results and he continues to like the business model for its low fixed costs and diversification.
Girsky sees $2.17 2005 earnings per share and does not have target.