In a report published Wednesday, KeyBanc Capital Markets downgraded its rating on Group 1 Automotive (NYSE: GPI) from Buy to Hold, and removed its price target which was previously $63.00.
KeyBanc noted, ?We are downgrading our rating for Group 1 Automotive, Inc. (GPI-NYSE) to a HOLD from a BUY and believe the shares are fairly valued at this time for the following reasons: 1) the outlook for the robust growth we anticipated from an aggressive pace of well-executed, disciplined acquisitions has softened near term, and we believe the increased uncertainty of the macro outlook is the likely driver, which could persist post Presidential elections and into 2013; 2) earnings upside is likely limited as GPI's potential to outperform the U.S. Light Vehicle SAAR driven by Toyota's recovery and BMW 3-series launch coming online appears largely reflected in the Street's estimates at this time; and 3) at current levels, valuation appears in line with the group's average and relatively in line with GPI's historical levels, while the potential for the multiple expansion we anticipated has weakened near term. We are maintaining our earnings estimates at $4.55 (First Call Consensus $4.66) for 2012 and at $5.01 (First Call Consensus $5.22) for 2013, as while we are taking down acquisitions assumptions in 2013, we believe SG&A leverage will be better as the expense of integrating acquisitions should be lower, slightly improving profitability.?
Group 1 Automotive closed on Tuesday at $54.31.
(c) 2012 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Tags: KeyBanc Capital Markets
Posted in: Analyst Color, Downgrades, Analyst Ratings
Advertisement?
kourtney kardashian pregnant again apple juice apple juice occupy la miranda kerr adriana lima victoria secret angels
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.