Some of you may have seen it last week, Group 1 Automotive Company (NYSE:GPI) announced its annual results to the market. Initial reaction was not positive, with the stock down 2.5% to $268 over the past week. Overall, the results seem to be a little negative. Sales matched analyst forecasts at his US$18 billion, but statutory earnings were below expectations, falling 5.6% short of his expectations to reach US$42.73 per share. Analysts typically update their forecasts with each earnings report, and we can use their forecasts to determine whether their view of the company has changed or if there are any new concerns to be aware of. . We thought our readers might find interesting the latest (statutory) post-earnings forecasts by the analysts for next year.
See our latest analysis for Group 1 Cars.
Taking into account the latest results, Group 1 Automotive's 3 analysts now expect revenue in 2024 to be US$17.9b, about the same as the previous twelve months. Statutory earnings per share are expected to decline 10% to US$40.64 over the same period. Prior to this earnings report, analysts had expected 2024 sales of US$18.1 billion and earnings per share (EPS) of US$42.45. So while overall sentiment appears to have declined slightly following the recent earnings results, there has been no significant change. Sales forecasts have been revised, but analysts have revised earnings per share forecasts slightly downward.
The consensus price target remains unchanged at US$318, with analysts apparently not expecting the downward revision to earnings estimates to lead to a decline in the stock price in the foreseeable future. It may also be useful to examine the range of analysts' estimates to assess how different the outlier's opinion is from the average. There are mixed views on Group 1 Automotive, with the most bullish analyst valuing it at $455 per share, and the most bearish at $200 per share. This is a fairly wide range of estimates, suggesting that the analysts are predicting a range of possible outcomes for the business.
Looking at the bigger picture now, one way to understand these forecasts is to see how they measure up against both past business performance and industry growth estimates. Group 1 Automotive's revenue growth is expected to slow, highlighting an expected annual growth rate of 0.4% to the end of 2024, well below the historic annual growth rate of 10% over the past five years I think that I want to do it. For comparison, other companies in the industry that are covered by analysts are expected to grow their revenue at 5.3% per year. So it's clear that while revenue growth is expected to slow, the broader industry is expected to grow faster than the Group 1 automotive industry.
conclusion
Most importantly, the analysts have revised down their earnings per share estimates, indicating a clear decline in sentiment following these results. Happily, the analysts also reaffirmed their earnings forecasts, suggesting things are in line with expectations. However, our data suggests that Group 1 Automotive revenue is expected to perform worse than the broader industry. There was no material change to the consensus price target, suggesting that the intrinsic value of the business has not changed significantly at the latest estimate.
Based on this idea, we think the long-term outlook for the business is far more relevant than next year's earnings. At Simply Wall St, we have all analyst forecasts for the Group 1 Automotive industry out to 2026, available for free on our platform.
However, you should always think about the risks.Good example we found Two warning signs for Group 1 vehicles. you should know.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodologies, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
