STOCKS NEWS EUROPE-Car dealers up; Lookers tops forecasts

Lookers (LOOK.L) shares climb 6 percent to 62 pence after the British car dealer says third-quarter results were well ahead of its expectations, helped by good demand for used cars and market share gains in new cars.

Shares in rival Pendragon (PDG.L) are also over 3 percent higher.

"Having restructured the business and strengthened the balance sheet, we believe (Lookers) management will turn to focus more on growth opportunities as we move into 2010," says KBC Peel Hunt analyst John Stevenson.

The analyst raises his profit forecasts for Lookers to 26.5 million pounds from 24.6 million pounds for the current financial year and to 31.5 million pounds from 29.7 million pounds for next year.

"Backed by strong cash generation, we see scope for modest acquisitions, while the absence of Audi and BMW in the portfolio may be addressed if the opportunity arises," he adds, keeping a "buy" rating on the stock and a target price of 80 pence.

To see Lookers' statement please click on [ID:nRnsd6345B]

Reuters Messaging: rm://mark.potter.reuters.com@reuters.net