Group 1 Automotive (NYSE:GPI) Sets New 1-Year Low on Disappointing Earnings

Key Points

• Group 1 Automotive shares hit a new 52-week low after quarterly earnings fell short of expectations. Adjusted EPS was $9.61 versus the $10.60 consensus, while revenue declined 5.6% year over year to $5.39 billion, below estimates.
• The company agreed to acquire 10 Hennessy Automobile dealerships and related real estate in Atlanta, a transaction expected to add approximately $1.7 billion in annualized revenue and immediately boost earnings per share after closing.
• Analysts remain broadly positive, with seven Buy ratings and three Holds and a consensus price target of $426.89, though several firms recently lowered their targets. Group 1 also completed a $50 million annualized cost-reduction initiative and maintains a quarterly dividend of $0.55 per share.

Group 1 Automotive, Inc. (NYSE:GPI - Get Free Report)'s share price hit a new 52-week low during mid-day trading on Friday after the company announced weaker than expected quarterly earnings. The company traded as low as $276.81 and last traded at $275.66, with a volume of 65502 shares. The stock had previously closed at $296.71.

The company reported $9.61 EPS for the quarter, missing the consensus estimate of $10.60 by ($0.99). Group 1 Automotive had a return on equity of 16.63% and a net margin of 1.46%.The business had revenue of $5.39 billion during the quarter, compared to analyst estimates of $5.66 billion. During the same quarter last year, the firm posted $10.82 EPS. The company's revenue was down 5.6% compared to the same quarter last year.

Group 1 Automotive Dividend Announcement

The firm also recently announced a quarterly dividend, which was paid on Monday, June 15th. Stockholders of record on Monday, June 1st were paid a dividend of $0.55 per share. This represents a $2.20 annualized dividend and a dividend yield of 0.8%. The ex-dividend date was Monday, June 1st. Group 1 Automotive's dividend payout ratio is 8.40%.

Group 1 Automotive News Roundup

Here are the key news stories impacting Group 1 Automotive this week:

• Positive Sentiment: Group 1 agreed to acquire 10 Hennessy Automobile Companies dealerships and related real estate in the Atlanta market. The transaction is expected to add approximately $1.7 billion in annualized revenue and be immediately accretive to earnings per share after closing, strengthening the company’s regional “cluster” strategy. Group 1 Agrees to Acquire Hennessy Automobile Dealerships
• Positive Sentiment: The company said it completed a $50 million annualized U.S. expense-reduction initiative. This could help offset weaker demand and support margins, although the quarter’s results suggest cost savings have not fully countered operating pressure. Group 1 Automotive Q2 Revenue Falls to $5.4 Billion
• Neutral Sentiment: Management’s earnings presentation and call focused on the Hennessy transaction, the company’s dealership-cluster strategy, cost reductions and current market conditions. Investors will likely look for evidence that the acquisition can deliver its projected earnings contribution without increasing financial risk. Group 1 Automotive 2026 Q2 Results Presentation
• Negative Sentiment: Adjusted earnings were $9.61 per share, below the $10.60–$10.79 analyst consensus and down from $11.52 a year earlier. Reported revenue of $5.39 billion also missed the $5.66 billion estimate and declined 5.6% year over year. Group 1 Automotive Q2 Earnings and Revenues Miss Estimates
• Negative Sentiment: Net income from continuing operations fell to $103.0 million from $139.8 million, while diluted continuing-operations EPS declined to $8.62 from $10.77. The weaker performance was attributed to softer consumer spending, raising concerns about demand for vehicle sales and dealership services. Group 1 Automotive Misses Second-Quarter Estimates

Wall Street Analyst Weigh In

Several analysts recently issued reports on GPI shares. JPMorgan Chase & Co. cut their price target on shares of Group 1 Automotive from $390.00 to $380.00 and set an "overweight" rating on the stock in a report on Monday, July 13th. Barclays cut their target price on shares of Group 1 Automotive from $470.00 to $435.00 and set an "overweight" rating on the stock in a research note on Wednesday, July 15th. Citigroup increased their price target on shares of Group 1 Automotive from $420.00 to $462.00 and gave the stock a "buy" rating in a research report on Monday, May 11th. Benchmark reiterated a "buy" rating on shares of Group 1 Automotive in a research note on Friday, July 10th. Finally, DA Davidson set a $425.00 price objective on Group 1 Automotive in a report on Friday, July 10th. Seven investment analysts have rated the stock with a Buy rating and three have issued a Hold rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and a consensus price target of $426.89.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently modified their holdings of the business. Allspring Global Investments Holdings LLC lifted its holdings in Group 1 Automotive by 2,053.8% in the fourth quarter. Allspring Global Investments Holdings LLC now owns 51,972 shares of the company's stock worth $20,403,000 after acquiring an additional 49,559 shares during the last quarter. WINTON GROUP Ltd acquired a new stake in shares of Group 1 Automotive during the 4th quarter worth approximately $5,167,000. Norges Bank acquired a new position in Group 1 Automotive during the 4th quarter valued at approximately $98,125,000. New Age Alpha Advisors LLC grew its stake in Group 1 Automotive by 1,001.6% during the 4th quarter. New Age Alpha Advisors LLC now owns 12,779 shares of the company's stock worth $5,026,000 after buying an additional 11,619 shares during the last quarter. Finally, Northwestern Mutual Wealth Management Co. grew its stake in Group 1 Automotive by 366,770.5% during the 4th quarter. Northwestern Mutual Wealth Management Co. now owns 25,431,464 shares of the company's stock worth $10,002,195,000 after buying an additional 25,424,532 shares during the last quarter. 99.92% of the stock is owned by institutional investors and hedge funds.

Group 1 Automotive Price Performance

The company has a quick ratio of 0.21, a current ratio of 0.95 and a debt-to-equity ratio of 1.00. The business has a 50 day simple moving average of $314.34 and a 200-day simple moving average of $331.68. The company has a market capitalization of $3.28 billion, a P/E ratio of 10.55, a PEG ratio of 0.95 and a beta of 0.83.

Group 1 Automotive Company Profile

Group 1 Automotive, Inc NYSE: GPI is an international automotive retailer headquartered in Houston, Texas. The company operates an extensive network of franchised dealerships, offering new and pre-owned vehicles from leading domestic and import manufacturers. In addition to vehicle sales, Group 1 Automotive provides a full complement of aftersales services, including finance and insurance products, parts distribution, collision repair centers and vehicle maintenance.

Founded in 1997, Group 1 Automotive has grown through both organic expansion and strategic acquisitions to establish a presence across the United States, the United Kingdom and Brazil.

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