Group 1 Automotive (GPI) Downgraded to “Hold” at Zacks Investment Research

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Group 1 Automotive (NYSE:GPI) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research note issued on Thursday.

According to Zacks, “Group 1 Automotive regularly opens new dealerships besides acquiring exiting ones. Last month, it opened three dealerships, of which two is in Texas and one in Brazil. Year to date, Group 1 acquired a total of 14 dealerships, with expected annual revenues of $530 million. It regularly acquires and divests dealerships and franchises to expand its business footprint. Further, the company’s higher cash balance allows it to frequently engage in capital deployment strategies, which include share buybacks and dividend payments. However, declining new vehicle sales in U.K. partly due to new emission tests are concerns for the company. Also, foreign currency vulnerability is a concern for the company. Over the past three months, shares of Group 1 Automotive company have underperformed the industry it belongs to.”

Several other research analysts also recently commented on the company. Buckingham Research raised Group 1 Automotive from a “neutral” rating to a “buy” rating and set a $70.00 price target on the stock in a research report on Monday, October 29th. They noted that the move was a valuation call. ValuEngine downgraded Group 1 Automotive from a “sell” rating to a “strong sell” rating in a research report on Tuesday, October 2nd. TheStreet downgraded Group 1 Automotive from a “b-” rating to a “c+” rating in a research report on Thursday, October 18th. Finally, Morgan Stanley boosted their price objective on Group 1 Automotive from $59.00 to $64.00 and gave the company a “sell” rating in a research report on Wednesday, August 15th. One equities research analyst has rated the stock with a sell rating, three have assigned a hold rating and three have assigned a buy rating to the company. Group 1 Automotive presently has an average rating of “Hold” and an average price target of $78.60.

Shares of NYSE GPI opened at $52.48 on Thursday. The company has a current ratio of 1.03, a quick ratio of 0.24 and a debt-to-equity ratio of 1.14. The company has a market capitalization of $1.02 billion, a price-to-earnings ratio of 6.79, a price-to-earnings-growth ratio of 3.66 and a beta of 2.05. Group 1 Automotive has a 12 month low of $51.90 and a 12 month high of $83.97.

Group 1 Automotive (NYSE:GPI) last issued its quarterly earnings results on Thursday, October 25th. The company reported $2.47 EPS for the quarter, topping the Thomson Reuters’ consensus estimate of $2.39 by $0.08. The company had revenue of $2.89 billion for the quarter. Group 1 Automotive had a return on equity of 15.48% and a net margin of 2.05%. On average, research analysts forecast that Group 1 Automotive will post 8.88 earnings per share for the current fiscal year.

Group 1 Automotive announced that its board has initiated a share repurchase plan on Thursday, October 25th that permits the company to buyback $100.00 million in outstanding shares. This buyback authorization permits the company to purchase up to 9.5% of its stock through open market purchases. Stock buyback plans are typically an indication that the company’s management believes its stock is undervalued.

Several institutional investors and hedge funds have recently added to or reduced their stakes in the company. Northern Trust Corp increased its position in shares of Group 1 Automotive by 3.0% during the second quarter. Northern Trust Corp now owns 846,026 shares of the company’s stock valued at $53,300,000 after purchasing an additional 24,446 shares during the period. LSV Asset Management increased its position in shares of Group 1 Automotive by 22.9% during the third quarter. LSV Asset Management now owns 804,044 shares of the company’s stock valued at $52,182,000 after purchasing an additional 149,800 shares during the period. OppenheimerFunds Inc. increased its position in shares of Group 1 Automotive by 2.9% during the second quarter. OppenheimerFunds Inc. now owns 625,444 shares of the company’s stock valued at $39,404,000 after purchasing an additional 17,350 shares during the period. Towle & Co. increased its position in shares of Group 1 Automotive by 3.0% during the third quarter. Towle & Co. now owns 398,889 shares of the company’s stock valued at $25,888,000 after purchasing an additional 11,790 shares during the period. Finally, Bank of New York Mellon Corp increased its position in shares of Group 1 Automotive by 1.3% during the third quarter. Bank of New York Mellon Corp now owns 394,376 shares of the company’s stock valued at $25,594,000 after purchasing an additional 5,049 shares during the period.

About Group 1 Automotive

Group 1 Automotive, Inc, through its subsidiaries, operates in the automotive retail industry. It sells new and used cars, light trucks, and vehicle parts; arranges vehicle financing; sells service and insurance contracts; and provides automotive maintenance and repair services. The company has operations primarily in the metropolitan areas of Alabama, California, Florida, Georgia, Kansas, Louisiana, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New Mexico, Oklahoma, South Carolina, and Texas in the United States; 28 towns in the United Kingdom; and in the metropolitan markets of Sao Paulo, Parana, Mato Grosso do Sul, and Santa Catarina, Brazil.

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