Yahoo Finance Group 1 Automotive, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
It's been a pretty great week for Group 1 Automotive, Inc. (NYSE:GPI) shareholders, with its shares surging 14% to US$300 in the week since its latest first-quarter results. It looks like a credible result overall - although revenues of US$4.5b were in line with what the analysts predicted, Group 1 Automotive surprised by delivering a statutory profit of US$10.80 per share, a notable 17% above expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Group 1 Automotive after the latest results.
View our latest analysis for Group 1 Automotive
After the latest results, the seven analysts covering Group 1 Automotive are now predicting revenues of US$18.8b in 2024. If met, this would reflect an okay 3.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to reduce 9.6% to US$39.51 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$18.9b and earnings per share (EPS) of US$38.85 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$321. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Group 1 Automotive at US$425 per share, while the most bearish prices it at US$255. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Group 1 Automotive's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 4.2% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this to the 146 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 4.9% per year. So it's pretty clear that, while Group 1 Automotive's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Group 1 Automotive analysts - going out to 2026, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Group 1 Automotive , and understanding this should be part of your investment process.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
