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Group 1 Automotive Grows on Acquisitions, Volatile Sales Ail
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On Nov 23, we issued an updated research report on Group 1 Automotive, Inc. (GPI - Free Report) .
Group 1 Automotive reported adjusted earnings per share of $2.23 for third-quarter 2017, surpassing the Zacks Consensus Estimate of $1.84. Quarterly revenues witnessed a decline of 6.6% year over year to $3.01 billion. However, the top line surpassed the Zacks Consensus Estimate of $2.82 billion.
In order to strengthen its footprint, the company frequently acquires and divests dealerships and franchises. It has already acquired 17 dealerships this year with estimated annualized revenues of $490 million. Apart from these acquisitions, the company divested its three dealerships, year to date.
As of Sep 30, 2017, Group 1 Automotive’s cash and cash equivalents stood at $66.9 million, an increase from $21 million as of Dec 31, 2016. This strong financial footing will help the company fund its dealership acquisitions and tide over the period of low sales.
During the third quarter, the company repurchased roughly 20,000 of outstanding shares for a total of $1.1 million. Further, for the same time frame, it declared a dividend of 25 cents per share, reflecting a sequential rise of 4.2%. These capital deployment strategies adopted by Group 1 Automotive emphasizes on its aim to enhance shareholder value.
Moreover, estimates for Group 1 Automotive for the fourth quarter have been going up. The Zacks Consensus Estimate for earnings per share for the quarter has been revised 3.3% upward to $1.89 over the last 30 days.
However, decline in new vehicle registration both in the United States as well as the United Kingdom, which fell 1.9% and 3.9%, respectively, in the first nine months of 2017, is a concern for the company. Also, Group 1 Automotive expects industry sales to remain volatile in the near term.
Weakening demand across all oil-dependent markets in the United States and Brazil is also a headwind for the company.
Price Performance
Shares of the company have outperformed the industry it belongs to over a month. The stock has rallied 11.1% compared with the industry’s 4.9% gain during the period.
Zacks Rank & Key Picks
Group 1 Automotive carries a Zacks Rank #3 (Hold).
BMW has an expected long-term growth rate of 4.2%. Over a year, shares of the company have moved up 17.3%.
PACCAR has an expected long-term growth rate of 10%. The stock has seen the Zacks Consensus Estimate for the current quarter earnings per share being revised 2.8% upward over the last 30 days.
BorgWarner has an expected long-term growth rate of 15%. Its shares have gained 30.8% in the last six months.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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Group 1 Automotive Grows on Acquisitions, Volatile Sales Ail
On Nov 23, we issued an updated research report on Group 1 Automotive, Inc. (GPI - Free Report) .
Group 1 Automotive reported adjusted earnings per share of $2.23 for third-quarter 2017, surpassing the Zacks Consensus Estimate of $1.84. Quarterly revenues witnessed a decline of 6.6% year over year to $3.01 billion. However, the top line surpassed the Zacks Consensus Estimate of $2.82 billion.
In order to strengthen its footprint, the company frequently acquires and divests dealerships and franchises. It has already acquired 17 dealerships this year with estimated annualized revenues of $490 million. Apart from these acquisitions, the company divested its three dealerships, year to date.
Group 1 Automotive, Inc. Price and Consensus
Group 1 Automotive, Inc. Price and Consensus | Group 1 Automotive, Inc. Quote
As of Sep 30, 2017, Group 1 Automotive’s cash and cash equivalents stood at $66.9 million, an increase from $21 million as of Dec 31, 2016. This strong financial footing will help the company fund its dealership acquisitions and tide over the period of low sales.
During the third quarter, the company repurchased roughly 20,000 of outstanding shares for a total of $1.1 million. Further, for the same time frame, it declared a dividend of 25 cents per share, reflecting a sequential rise of 4.2%. These capital deployment strategies adopted by Group 1 Automotive emphasizes on its aim to enhance shareholder value.
Moreover, estimates for Group 1 Automotive for the fourth quarter have been going up. The Zacks Consensus Estimate for earnings per share for the quarter has been revised 3.3% upward to $1.89 over the last 30 days.
However, decline in new vehicle registration both in the United States as well as the United Kingdom, which fell 1.9% and 3.9%, respectively, in the first nine months of 2017, is a concern for the company. Also, Group 1 Automotive expects industry sales to remain volatile in the near term.
Weakening demand across all oil-dependent markets in the United States and Brazil is also a headwind for the company.
Price Performance
Shares of the company have outperformed the industry it belongs to over a month. The stock has rallied 11.1% compared with the industry’s 4.9% gain during the period.
Zacks Rank & Key Picks
Group 1 Automotive carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the auto space are BMW AG (BAMXF - Free Report) ), PACCAR Inc. (PCAR - Free Report) and BorgWarner Inc. (BWA - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
BMW has an expected long-term growth rate of 4.2%. Over a year, shares of the company have moved up 17.3%.
PACCAR has an expected long-term growth rate of 10%. The stock has seen the Zacks Consensus Estimate for the current quarter earnings per share being revised 2.8% upward over the last 30 days.
BorgWarner has an expected long-term growth rate of 15%. Its shares have gained 30.8% in the last six months.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>