Group 1 Automotive (NYSE:GPI) Shares Down 10.5% Following Weak Earnings

Key Points

• Group 1 Automotive shares fell 10.5% after the company reported quarterly EPS of $9.61, missing the $10.60 consensus estimate, while revenue of $5.39 billion also came in below expectations and declined 5.6% year over year.
• The company declared a quarterly dividend of $0.55 per share, equivalent to $2.20 annually and a 0.7% yield, with a current payout ratio of 8.4%.
• Despite the earnings miss and reduced price targets from some analysts, the stock retains a “Moderate Buy” consensus, supported by seven Buy ratings and an average price target of $426.89.

Group 1 Automotive, Inc. (NYSE:GPI - Get Free Report) fell 10.5% during mid-day trading on Thursday following a dissappointing earnings announcement. The company traded as low as $313.40 and last traded at $320.2540. 38,593 shares traded hands during mid-day trading, a decline of 79% from the average daily volume of 182,389 shares. The stock had previously closed at $357.97.

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

Group 1 Automotive Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Monday, June 15th. Shareholders of record on Monday, June 1st were paid a $0.55 dividend. This represents a $2.20 dividend on an annualized basis and a yield of 0.7%. The ex-dividend date of this dividend was Monday, June 1st. Group 1 Automotive's payout ratio is currently 8.40%.

Analyst Ratings Changes

Several research firms have recently weighed in on GPI. JPMorgan Chase & Co. lowered their price objective on shares of Group 1 Automotive from $390.00 to $380.00 and set an "overweight" rating on the stock in a research 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 for the company in a research report on Wednesday, July 15th. Benchmark reissued a "buy" rating on shares of Group 1 Automotive in a research note on Friday, July 10th. Evercore set a $440.00 price target on Group 1 Automotive in a research report on Tuesday, July 7th. Finally, UBS Group dropped their price target on Group 1 Automotive from $338.00 to $330.00 and set a "neutral" rating for the company in a research note on Friday, July 10th. Seven investment analysts have rated the stock with a Buy rating and three have issued a Hold rating to the company. Based on data from MarketBeat.com, Group 1 Automotive presently has a consensus rating of "Moderate Buy" and an average target price of $426.89.

Institutional Investors Weigh In On Group 1 Automotive

Hedge funds have recently made changes to their positions in the business. Northwestern Mutual Wealth Management Co. grew its holdings in shares of 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 valued at $10,002,195,000 after purchasing an additional 25,424,532 shares during the last quarter. Norges Bank bought a new stake in Group 1 Automotive in the fourth quarter worth $98,125,000. Franklin Resources Inc. boosted its position in Group 1 Automotive by 968.8% during the third quarter. Franklin Resources Inc. now owns 84,412 shares of the company's stock valued at $36,931,000 after buying an additional 76,514 shares during the period. Allspring Global Investments Holdings LLC boosted its position in Group 1 Automotive by 2,053.8% during the fourth quarter. Allspring Global Investments Holdings LLC now owns 51,972 shares of the company's stock valued at $20,403,000 after buying an additional 49,559 shares during the period. Finally, Man Group plc bought a new position in shares of Group 1 Automotive during the second quarter valued at about $17,959,000. 99.92% of the stock is currently owned by institutional investors.

Group 1 Automotive Stock Performance

The stock has a market cap of $3.71 billion, a PE ratio of 11.90, a P/E/G ratio of 0.93 and a beta of 0.83. The company has a fifty day moving average price of $314.80 and a 200 day moving average price of $332.43. The company has a quick ratio of 0.21, a current ratio of 0.95 and a debt-to-equity ratio of 1.00.

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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