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

Zacks Investment Research downgraded shares of Group 1 Automotive (NYSE:GPI) from a buy rating to a hold rating in a research report released on Thursday morning.

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 firms also recently weighed in on GPI. Morgan Stanley increased their target price on Group 1 Automotive from $59.00 to $64.00 and gave the stock a sell rating in a research report on Wednesday, August 15th. ValuEngine downgraded Group 1 Automotive from a hold rating to a sell rating in a research report on Saturday, September 22nd. Buckingham Research upgraded Group 1 Automotive from a neutral rating to a buy rating and set a $70.00 target price on the stock in a research report on Monday, October 29th. They noted that the move was a valuation call. Finally, TheStreet downgraded Group 1 Automotive from a b- rating to a c+ rating in a research report on Thursday, October 18th. One equities research analyst has rated the stock with a sell rating, three have given a hold rating and three have issued a buy rating to the stock. Group 1 Automotive currently has an average rating of Hold and a consensus target price of $78.60.

Shares of NYSE:GPI traded down $0.08 on Thursday, hitting $53.24. The company had a trading volume of 6,984 shares, compared to its average volume of 212,845. The company has a quick ratio of 0.24, a current ratio of 1.03 and a debt-to-equity ratio of 1.14. Group 1 Automotive has a 52-week low of $51.90 and a 52-week high of $83.97. The company has a market capitalization of $1.02 billion, a P/E ratio of 6.87, a P/E/G ratio of 3.66 and a beta of 2.05.

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

Group 1 Automotive declared that its board has authorized a stock buyback program on Thursday, October 25th that allows the company to buyback $100.00 million in outstanding shares. This buyback authorization allows the company to purchase up to 9.5% of its stock through open market purchases. Stock buyback programs are usually a sign that the company’s management believes its stock is undervalued.

The firm also recently announced a quarterly dividend, which will be paid on Monday, December 17th. Investors of record on Monday, December 3rd will be given a dividend of $0.26 per share. The ex-dividend date of this dividend is Friday, November 30th. This represents a $1.04 annualized dividend and a yield of 1.95%. Group 1 Automotive’s dividend payout ratio (DPR) is presently 13.45%.

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Cubist Systematic Strategies LLC raised its holdings in shares of Group 1 Automotive by 2,902.7% in the 2nd quarter. Cubist Systematic Strategies LLC now owns 22,580 shares of the company’s stock worth $1,423,000 after purchasing an additional 21,828 shares during the period. Tower Research Capital LLC TRC purchased a new position in shares of Group 1 Automotive in the 2nd quarter worth about $135,000. Livingston Group Asset Management CO operating as Southport Capital Management purchased a new position in shares of Group 1 Automotive in the 3rd quarter worth about $109,000. Meadow Creek Investment Management LLC raised its holdings in shares of Group 1 Automotive by 74.4% in the 2nd quarter. Meadow Creek Investment Management LLC now owns 3,300 shares of the company’s stock worth $208,000 after purchasing an additional 1,408 shares during the period. Finally, Martingale Asset Management L P purchased a new position in shares of Group 1 Automotive in the 2nd quarter worth about $246,000.

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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