Credit Acceptance Q3 adj EPS beats estimates, helped by fall in provision for credit losses

Overview

• Credit Acceptance Q3 adjusted EPS of $10.28 beats analyst expectations

• Adjusted net income for Q3 was $117.9 mln, surpassing estimates

• Company repurchased $107.4 mln in shares, about 2% of outstanding shares

Outlook

• Company expects system modernization to improve loan origination speed

• Credit Acceptance anticipates acceptable returns despite loan performance challenges

• Company sees improvement in product initiatives enhancing dealer and consumer value

Result Drivers

• LOAN VOLUME DECLINE - Co reports a 16.5% decline in Consumer Loan assignment unit volume, attributed to fewer active dealers and lower average volume per dealer

• SYSTEM MODERNIZATION - Co highlights improvements from modernizing loan origination system, enhancing delivery speed and dealer experience

• PROVISION FOR CREDIT LOSSES - Decrease in provision for credit losses contributed to higher net income, despite challenging loan performance

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 3 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the consumer lending peer group is "buy."

• Wall Street's median 12-month price target for Credit Acceptance Corp is $462.50, about 0.7% above its October 29 closing price of $459.29

Press Release: ID:nGNX8lCgLv

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)