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Group 1 Automotive (GPI) Soars 8.4%: Is Further Upside Left in the Stock?
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Group 1 Automotive (GPI - Free Report) shares soared 8.4% in the last trading session to close at $162.87. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 4.1% loss over the past four weeks.
Yesterday's rally came after the company released impressive preliminary second-quarter 2021 results despite the ongoing chip dearth. The auto retailer anticipates second-quarter 2021 adjusted earnings of around $10.20-$10.70 per share, up from $5.57 recorded in the prior quarter. The bottom-line projection for the to-be-reported quarter also represents a significant uptick from $3.77 a share reported in the second quarter of 2020.
Group 1 has been able to navigate the challenges fairly well, as is evident from its strong earnings and sales projections. Solid vehicle margins in the United States, recovery in the UK market, operational discipline and strength in the U.S. service business are likely to have aided Group 1’s results in the second quarter of 2021.
This auto dealer is expected to post quarterly earnings of $5.48 per share in its upcoming report, which represents a year-over-year change of +45.4%. Revenues are expected to be $3.13 billion, up 47% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Group 1 Automotive, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on GPI going forward to see if this recent jump can turn into more strength down the road.
Image: Bigstock
Group 1 Automotive (GPI) Soars 8.4%: Is Further Upside Left in the Stock?
Group 1 Automotive (GPI - Free Report) shares soared 8.4% in the last trading session to close at $162.87. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 4.1% loss over the past four weeks.
Yesterday's rally came after the company released impressive preliminary second-quarter 2021 results despite the ongoing chip dearth. The auto retailer anticipates second-quarter 2021 adjusted earnings of around $10.20-$10.70 per share, up from $5.57 recorded in the prior quarter. The bottom-line projection for the to-be-reported quarter also represents a significant uptick from $3.77 a share reported in the second quarter of 2020.
Group 1 has been able to navigate the challenges fairly well, as is evident from its strong earnings and sales projections. Solid vehicle margins in the United States, recovery in the UK market, operational discipline and strength in the U.S. service business are likely to have aided Group 1’s results in the second quarter of 2021.
This auto dealer is expected to post quarterly earnings of $5.48 per share in its upcoming report, which represents a year-over-year change of +45.4%. Revenues are expected to be $3.13 billion, up 47% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Group 1 Automotive, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on GPI going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>