Ahead of the Bell: Analyst raises Penske to 'Buy'

Goldman Sachs analyst Matthew Fassler raised Penske to "Buy" from "Neutral" in a note to investors. The recent sell-off in retail stocks, particularly auto retailers, is a good entry point for the "high-quality dealer group with a diversified revenue stream, favorable product mix, high-quality management team and clean balance sheet," he said.

However, Fassler cut his earnings estimates on the Bloomfield Hills, Mich., company, as it continues to weather the sluggish auto market. Vehicle dealerships have taken a hit recently as auto sales plunge due to the weak economy and tight credit markets.

He assigned a price target of $8.50, which implies an expected return of 32 percent over the stock's Tuesday close of $6.45. Shares of Penske are down 63 percent since the beginning of the year.