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UPDATE: Credit Suisse Reinstates Group 1 Automotive with Neutral on Upside Potential, Gross Margin Pressure

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In a report published Wednesday, Credit Suisse analyst Gary Balter reinstated coverage on Group 1 Automotive (NYSE: GPI) with a Neutral rating and $70.00 price target.

In the report, Balter noted, “We believe the upside potential from strong new vehicle sales may be offset by new vehicle gross margin pressure and below average expense leverage in the nearterm. The setup for GPI becomes more intriguing by the back half of 2013, in our view, as expense growth moderates, centralization initiatives drive savings, an appreciating Yen boosts J3 sales, and accretion from the UAB acquisition ramps up. We are establishing '13, '14 and '15 estimates of $5.05, $5.60 and $6.05, respectively. Our $70 price target reflects 12.5x our '14 estimate. We believe GPI is one of the best managed and best positioned public auto dealers.”

Group 1 Automotive closed on Tuesday at $59.51.

Latest Ratings for GPI

DateFirmActionFromTo
Jul 2014KeyBancMaintainsBuy
May 2014KeyBancMaintainsBuy
Oct 2013Morgan StanleyDowngradesOverweightUnderweight

View More Analyst Ratings for GPI
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Posted-In: Credit SuisseAnalyst Color Initiation Analyst Ratings

 

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