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Group 1 (GPI) Extends in Brazil via Dealership Acquisition

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Group 1 Automotive, Inc. (GPI - Free Report) acquired a new Toyota sales territory in the western Sao Paulo of Brazil. Additionally, the company expanded an existing Honda dealership in Sao Bernardo do Campo, situated in the suburb of Sao Paulo.

The newly acquired business will function under T-Drive Toyota Alphaville and is anticipated to generate roughly $45 million in yearly revenues. With this acquisition, T-Drive Toyota Alphaville became Group 1 Automotive’s fourth Toyota dealership in Brazil. Further, the company was given a few additional Toyota points of representation inside the Sao Paulo market. Names and locations of these points will be announced once those get functional.

Per management, this acquisition, along with Group 1 Automotive’s existing stores, will generate opportunities and growth potential by offering a large Toyota operating footprint across Brazil's largest city. Toyota is the largest brand partner for Group 1 Automotive.

Group 1 Automotive, Inc. Price and Consensus

 

The company also reported the relocation of its key Sao Paulo Honda dealership to a larger facility with freeway visibility. This will enable Group 1 Automotive to almost double revenues within a shorter period. In Brazil, the company is the largest seller of Honda cars, which holds four dealerships in the greater São Paulo metropolitan area.

Currently, Group 1 Automotive operates 17 dealerships of seven different brands in Brazil, including BMW, Honda, Jaguar, Land Rover, MINI, Mercedes-Benz and Toyota.

Price Performance

Over a year, shares of Group 1 Automotive have underperformed the industry it belongs to. During the period, its stock has edged down 8.3% in comparison with the industry’s decline of 5.1%.

 

 

Zacks Rank & Key Picks

Group 1 Automotive carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Dana Incorporated (DAN - Free Report) , AB Volvo (VLVLY - Free Report) and PACCAR Inc. (PCAR - Free Report) . While Dana sports a Zacks Rank #1 (Strong Buy), Volvo and PACCAR carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Dana has expected long-term growth rate of 10%. Over a year, shares of the company have gained 42.2%.

Volvo has expected long-term growth rate of 15%. Shares of the company have risen 33.2% in the past year.

PACCAR has expected long-term growth rate of 9.8%. Over a year, shares of the company have gained 7.6%.

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