Standard & Poor's (S&P) Ratings Services has upgraded
its rating outlook on
Group 1 Automotive Inc.
) to Positive from Stable, based on the company's improved credit
measures and possibility of further enhancement. However, the
rating agency retained its corporate credit rating of "BB "and
other related issue-level ratings on its debt.
AUTONATION INC (AN): Free Stock Analysis Report
GROUP 1 AUTO (GPI): Free Stock Analysis Report
PENSKE AUTO GRP (PAG): Free Stock Analysis
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The positive outlook suggests a possibility of upgrade from 'BB'
rating to 'BB+' over the next year. The upgrade will be based on
the improvement of the company's profitability and cash flows,
better leverage and balance between its strategic and financial
policies with the credit quality.
The company witnessed an improvement in credit measures on the back
of higher vehicle sales and growth in credit market. The rating
agency expects further improvement based on the company's flexible
business model, focused financial policy and operating expertise.
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 results surpassed the Zacks
Consensus Estimate of $1.16. Profit escalated 20.1% to $29.7
million from $24.8 million in the year-ago quarter.
Total revenues went up 28.6% year over year to $1.9 billion in the
quarter, owing to strong retail new vehicle and used vehicle unit
sales. Revenues beat the Zacks Consensus Estimate of $1.7 billion.
Headquartered in Memorial City of Houston, Texas, Group 1
Automotive is one of the largest automotive retailers in the 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 #3 Rank, which translates
into a short-term (1 to 3 months) Hold rating.