Group 1 Automotive (NYSE:GPI) Releases Earnings Results, Misses Estimates By $0.99 EPS

Group 1 Automotive (NYSE:GPI) announced its quarterly earnings data on Thursday. The company reported $9.61 earnings per share (EPS) for the quarter, missing the consensus estimate of $10.60 by ($0.99), FiscalAI reports. Group 1 Automotive had a return on equity of 15.74% and a net margin of 1.31%.The firm had revenue of $5.39 billion during the quarter, compared to analysts’ expectations of $5.66 billion. During the same quarter in the previous year, the business earned $10.82 earnings per share. The company’s revenue for the quarter was down 5.6% compared to the same quarter last year.

Here are the key takeaways from Group 1 Automotive’s conference call:

• Challenging U.S. quarter: Q2 revenue was $5.4 billion and adjusted EPS was $9.61, but U.S. new- and used-vehicle volumes declined amid affordability pressures, limited used-vehicle sourcing, inventory issues, and temporary disruption from store rebranding.
• Hennessy acquisition expands Atlanta presence: Group 1 agreed to acquire 10 dealerships for approximately $1.3 billion, increasing its Atlanta footprint from three to 15 stores. The company expects the transaction to be immediately EPS-accretive, with the dealerships generating about $1.7 billion in annual revenue and EBITDA margins above 7%.
• Significant cost reductions were completed: U.S. operations exceeded their target of eliminating 700 positions and $50 million in annual expenses. Management expects approximately $12.5 million of quarterly savings in the second half of 2026, flowing into 2027.
• After-sales remains resilient but faces changing customer behavior: Same-store U.S. customer-pay revenue rose 4%, while warranty revenue increased 1%, despite difficult comparisons and a shift toward aftermarket providers as more vehicles leave factory warranty. Group 1 is emphasizing service-advisor training, lower-cost promotions, and its One Care maintenance plan to improve retention.
• Leverage will temporarily increase: The Hennessy purchase is expected to lift rent-adjusted leverage to just under 4 times from 3.3 times at quarter-end. Management plans to use debt financing and planned dispositions to return leverage to its target level by mid-to-late 2027, and does not expect to repurchase shares before the acquisition closes.

Group 1 Automotive Price Performance

Shares of Group 1 Automotive stock traded down $9.54 on Friday, hitting $287.18. The company’s stock had a trading volume of 420,093 shares, compared to its average volume of 179,724. The company has a market capitalization of $3.42 billion, a price-to-earnings ratio of 11.96, a price-to-earnings-growth ratio of 0.79 and a beta of 0.83. Group 1 Automotive has a 1 year low of $274.27 and a 1 year high of $488.39. The company has a debt-to-equity ratio of 1.00, a quick ratio of 0.21 and a current ratio of 0.95. The firm has a fifty day moving average price of $313.57 and a 200-day moving average price of $331.37.

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 given a dividend of $0.55 per share. The ex-dividend date was Monday, June 1st. This represents a $2.20 dividend on an annualized basis and a dividend yield of 0.8%. Group 1 Automotive’s dividend payout ratio (DPR) is 8.40%.

Wall Street Analysts Forecast Growth

Several equities research analysts have commented on GPI shares. Evercore set a $440.00 price target on shares of Group 1 Automotive in a report on Tuesday, July 7th. Benchmark reissued a “buy” rating on shares of Group 1 Automotive in a report on Friday, July 10th. UBS Group lowered their target price on Group 1 Automotive from $338.00 to $330.00 and set a “neutral” rating on the stock in a research note on Friday, July 10th. Barclays dropped their target price on Group 1 Automotive from $470.00 to $435.00 and set an “overweight” rating on the stock in a report on Wednesday, July 15th. Finally, Weiss Ratings reissued a “hold (c)” rating on shares of Group 1 Automotive in a report on Friday, June 12th. Six investment analysts have rated the stock with a Buy rating and four have issued a Hold rating to the stock. According to MarketBeat.com, Group 1 Automotive presently has a consensus rating of “Moderate Buy” and a consensus price target of $420.22.

More Group 1 Automotive News

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 Atlanta. The transaction is expected to add approximately $1.7 billion in annualized revenue and be immediately accretive to earnings per share after closing, strengthening Group 1’s dealership cluster strategy. The company also completed a $50 million annualized U.S. cost-reduction initiative. Group 1 Hennessy acquisition announcement
• Neutral Sentiment: Group 1 ended the quarter with 251 dealerships across the U.S. and U.K. Management’s earnings presentation and conference call provided additional detail on operating trends, the cost-savings program and the proposed Hennessy acquisition, but the acquisition remains subject to regulatory approvals and customary closing conditions. Group 1 Automotive second-quarter earnings presentation
• Negative Sentiment: Second-quarter results missed Wall Street expectations. Adjusted EPS was $9.61, below consensus estimates ranging from $10.60 to $10.79, while revenue of $5.39 billion fell short of approximately $5.66 billion. Revenue declined 5.6% year over year, and earnings were lower than the prior-year period as consumer spending softened. Net income from continuing operations fell to $103.0 million from $139.8 million. Group 1 Automotive second-quarter earnings miss
• Negative Sentiment: JPMorgan downgraded GPI from “overweight” to “neutral” and reduced its price target from $380 to $320. Although the revised target implies potential upside, the downgrade signals less confidence in near-term outperformance following the earnings shortfall. Benzinga report on JPMorgan’s Group 1 Automotive downgrade

Institutional Trading of Group 1 Automotive

Institutional investors have recently bought and sold shares of the business. Johnson Financial Group Inc. acquired a new position in shares of Group 1 Automotive during the 3rd quarter worth approximately $55,000. Aster Capital Management DIFC Ltd purchased a new stake in Group 1 Automotive in the 4th quarter worth $57,000. State of Wyoming raised its position in Group 1 Automotive by 28.2% during the fourth quarter. State of Wyoming now owns 191 shares of the company’s stock worth $75,000 after acquiring an additional 42 shares during the period. McMillan Office Inc. acquired a new stake in shares of Group 1 Automotive in the fourth quarter valued at about $157,000. Finally, Smartleaf Asset Management LLC increased its stake in shares of Group 1 Automotive by 10.3% during the fourth quarter. Smartleaf Asset Management LLC now owns 472 shares of the company’s stock worth $189,000 after purchasing an additional 44 shares in the last quarter. 99.92% of the stock is owned by institutional investors and hedge funds.

About Group 1 Automotive

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.