Stephens Starts Group 1 Automotive Inc. (GPI) at Equal Weight

Stephens analyst Jeff Lick initiates coverage on Group 1 Automotive Inc. (NYSE: GPI) with a Equal Weight rating and a price target of $394.00.

The analyst comments "We are initiating coverage on GPI with an EW rating and $394 PT based on an EV/EBITDA multiple of 8.0x on our 2025 EBITDA estimate. GPI’s LT average EV/EBITDA multiple is 7.7x, but we believe this historical multiple discount relative to other Public 6 companies was related to its Brazilian exposure, which was divested in 2022. During 3Q24, GPI closed on the UK based Inchcape acquisition, which will add ~$2.7B of revenue or roughly 15% of GPI’s 2Q24 TTM total. We believe the Inchcape acquisition could create significant value, but will likely put pressure on GPI’s SG&A in the first year. We estimate GPI’s EPS will reach $42.03 in 2026, growing ~7% from our 2025 estimate. GPI has acquired ~36% of its shares outstanding since 2019 and 5.5% over the last 12 months. GPI also pays a small annual dividend currently yielding less than 1%. Our initial cautiousness with GPI is based on the uncertainty of the Inchcape acquisition given its size relative to GPI’s total operation. We estimate that GPI will reduce its share count by ~4% in 2024 and ~3% in both 2025 and 2026. We also model that GPI will acquire $400M in annual revenue each in 2025 and 2026."

For an analyst ratings summary and ratings history on Group 1 Automotive Inc. click here. For more ratings news on Group 1 Automotive Inc. click here.

Shares of Group 1 Automotive Inc. closed at $347.06 yesterday.

You May Also Be Interested In

• flyExclusive says Jet.AI merger needs 22,500 more votes to pass
• B.Riley Starts Suncrete Inc (RMIX) at Buy
• Sunbelt Rentals (SUNB) PT Lowered to $74 at JPMorgan