Citi raises Group 1 Automotive stock target to $495

On Monday, Citi analyst Michael Ward adjusted the price target for Group 1 Automotive Inc . (NYSE:GPI), increasing it to $495 from the previous $463, while reiterating a Buy rating on the shares. Ward cited the auto dealer’s resilience to higher tariffs compared to other sectors, noting that Group 1 Automotive has consistently outperformed the S&P 500 over the last four years, with a year-to-date rise of 5.5%.

The analyst’s report praised Group 1 Automotive’s first-quarter earnings, which surpassed expectations and demonstrated the company’s ability to manage the impact of higher tariffs effectively. Looking ahead, Ward anticipates another robust quarter in the second quarter for the company, driven by a rise in demand within the United States, reduced floorplan interest expenses, and increases in the Parts & Services sector. Additionally, improvements in cost management in the UK, a lower share count, and a favorable comparison to the previous year due to the CDK shutdown are expected to contribute to the company’s success.

The report also suggests that the positive momentum Group 1 Automotive is experiencing could lead to an adjustment of valuation multiples towards more normalized levels. According to InvestingPro data, analyst targets range from $385 to $545 per share, with a strong Buy consensus. The optimism surrounding the company’s performance and future prospects is reflected in the newly raised price target of $495 per share, aligning with InvestingPro’s Fair Value assessment of the stock.

In other recent news, Group 1 Automotive has reported its Q1 2025 earnings, surpassing market expectations. The company achieved an adjusted diluted earnings per share (EPS) of $10.17, beating the forecast of $9.56, and reported a revenue of $5.5 billion, exceeding the anticipated $5.34 billion. This strong financial performance is highlighted by a record quarterly gross profit of $892 million and robust cash flow generation. The company continues to expand its dealership network, particularly in the UK, reflecting its strategic growth initiatives. Additionally, Group 1 Automotive has maintained a strong liquidity position, supporting its ongoing capital allocation strategies, including acquisitions and share repurchases. The company also announced a 3% reduction in its share count since January 1, 2025, through stock buybacks. Furthermore, Group 1 Automotive is focusing on aftersales and service opportunities, which the CEO emphasized as a key differentiator for the company. Analysts have noted that the company’s strategic expansions and operational efficiencies have positioned it well against industry competitors.

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