Group 1 Automotive Inc. (NYSE: GPI), the fourth-largest US auto retailer, operates 259 dealerships across the US and UK. Its revenue mix is defensive, with parts, service, finance, and insurance contributing 70% of profits.
The 2024 Inchcape acquisition expanded UK exposure to 27% of revenue. However, UK EBIT margins are just 2.5% vs. 5.5% in the US, creating a drag on profitability.
Gross profit per unit fell in Q4 2025, leading analysts to cut estimates. EPS forecasts are $40.85 for FY2026 and $47.65 for FY2027. The US market is expected to grow, with SAAR reaching 16.2 million units in 2026 and 16.7 million in 2027.
GPI trades at a P/E of 12.5x trailing earnings. Management is expected to pursue share buybacks and bolt-on acquisitions, leveraging its $4.3 billion market cap.
The stock has fallen 20% over six months, but analysts see potential upside from US market strength and capital allocation.
