Risk Reward Update

研报英文原文证据摘录

Risk Reward Update

UpdateM

RiskRisk RewardReward– Group-1 GroupAutomotive,1 IncAutomotive,(GPI.N) Inc (GPI.N)

Insulation from EV deceleration, Favorable Brand and Demographic Exposure

PRICE TARGET $400.00 OVERWEIGHT THESIS

Our $400 PT is based on a 6 year DCF, driven by a 3.8% 2026-2032 revenue CAGR with a ▪GPUs will continue to normalize post-

4.4% FY26 EBITDA Margin. We assume a 1.8% terminal growth rate and 8.8% WACC. Base pandemic, but will settle at a higher floor vs.

Case triangulated with PE multiple implies 9.2x $43.61 FY26 earnings. 2019 levels

at a discount relative to the $435.29 ▪Trades

franchise dealer average

Consensus Price Target Distribution $338.00 $500.00 Japanese OEM exposure (Toyota MS PT ▪Favorable

Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates ~1/4 of sales) positions GPI well for

recovering supply and Hybrid demand

▪Geographic diversification in UK markets

provides a stable sales backdrop

RISK REWARD CHART ▪Secular bear thesis around DTC EV

disruption pushed out at the margin given

USD slowing EV sales

$515.00$515.00(+71.20%)$515.00(+71.20%)(+71.20%)

Consensus Rating Distribution

77% Overweight

$400.00$400.00(+32.97%)$400.00(+32.97%)(+32.97%) 23% Equal-weight

0% Underweight

$300.82$300.82$300.82 MS Rating

240 Source: Refinitiv, Morgan Stanley Research

$230.00$230.00(-23.54%)$230.00(-23.54%)(-23.54%)

120 Risk Reward Themes

Secular Growth: Negative

Self-help: Positive

JUN '25 DEC '25 JUN '26 JUN '27 View descriptions of Risk Rewards Themes here

Key: Historical Stock Performance Current Stock Price Price Target

Source: Refinitiv, Morgan Stanley Research

BULL CASE $515.00 BASE CASE $400.00 BEAR CASE $230.00

Higher growth due to strong execution Topline growth, with margins higher than Loss of share, with margins receding