Moody's Investors Services has upgraded its corporate family and
probability of default ratings on
Group 1 Automotive Inc.
) to "Ba2" from "Ba3". The revision is based on the company's
improved financial position and lower credit risk. Moreover,
Moody's conferred a stable outlook on the company.
AUTONATION INC (AN): Free Stock Analysis Report
GROUP 1 AUTO (GPI): Free Stock Analysis Report
PENSKE AUTO GRP (PAG): Free Stock Analysis
TOYOTA MOTOR CP (TM): Free Stock Analysis
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The enhancement in rating by Moody's also reflects the company's
initiative in debt reduction and cost control. These measures are
leading to higher profits.
Group 1, in the second quarter of 2012, registered a 21.4% increase
in adjusted earnings per share to $1.25 from $1.03 in the
corresponding quarter last year. The earnings per share surpassed
the Zacks Consensus Estimate of $1.16. Profit escalated 20.1% to
$29.7 million from $24.8 million in the year-ago
Total revenues went up 28.6% year over year to $1.9 billion in the
quarter, owing to the strong retail new vehicle and used vehicle
unit sales. Revenues beat the Zacks Consensus Estimate of $1.7
The rating service considers that the uncertainty concerning
Toyota Motor Corporation
), which constitutes about 30% of the company's revenues, has
largely been minimized. Toyota's business was jeopardized due to
vehicle recalls and supply shortages emanating from the earthquake
and tsunami in Japan last year.
Headquartered in Memorial City of Houston, Texas, Group 1
Automotive is one of the largest automotive retailers in U.S.,
providing 31 automotive brands. It has 122 automotive dealerships,
159 franchises and 28 collision centers in the U.S. and the
U.K. The company offers new and used cars, light trucks and
is also engaged in sales financing activities.
In addition, the company provides insurance contracts, maintenance
and repair services along with vehicle parts to its customers. It
Penske Automotive Group Inc.
). Currently, Group 1 retains a Zacks #2 Rank, which translates
into a short-term (1 to 3 months) Buy rating.