GPI - Group 1 Automotive gains after J.P. Morgan turns bullish

J.P. Morgan upgraded Group 1 Automotive ( NYSE: GPI ) to an Overweight rating after having it slotted at Neutral.

Analyst Rajat Gupta and team see GPI’s initiative to drive higher used vehicle growth in a flattening SAAR environment as positive.

"GPI’s parts & services initiatives to increase technician headcount and better use existing manpower are compelling, in our view, with drop-through to the bottom line starting to show. EBITDA growth, balance sheet optionality, and standing ROIC are in line with group averages, though we see upside to standing consensus, which in our view is not discounted in current valuation."

The firm assigned a December 2023 price target on GPI of $210, which works out to a 6.6X multiple to the 2024E EPS estimate.

Shares of GPI rose 2.15% to $153.29 in premarket action on Thursday vs. the 52-week trading range of $136.55 to $212.23.

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