A Hold recommendation has recently been issued to auto ancillary Penske Auto Group (PAG) by Zacks senior automobile industry analyst Paul Raman, CFA.  Here's what his latest update had to say about it:

'Penske Auto Group is well-positioned among the auto ancillary retailer peer group. The Penske Auto Group's specialty and luxury product mix offers opportunity for long-term growth. Additionally, we are encouraged by positive same-store sales in both new and used vehicles.

'However, rising interest rates, challenging industry conditions and a leveraged balance sheet dampen our outlook on the stock. Thus, we lower our rating to a Hold with a six-month target price of $17.50. Currently, shares of Penske Auto Group are trading at 12.2x our 2007 EPS estimate of $1.52. The company has a unique business model, a strong luxury automotive market, and a high growth rate.

'However, rising interest rates, challenging industry environment, and a highly leveraged balance sheet make us apprehensive about the stock in the near-term. Thus, we rate the stock a Hold and maintain the six-month target price at $17.50, which is 12.0x our 2007 EPS estimate.'