Group 1 Automotive: Downgrade to Neutral as Swift SS GP Direction Change and High Leverage Blunts Relative Revision Trajectory

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Group 1 Automotive: Downgrade to Neutral as Swift SS GP Direction Change and High Leverage Blunts Relative Revision Trajectory

J P M O R G A N North America Equity Research

31 July 2026

Group 1 Automotive ▼Neutral

Previous: Overweight

Downgrade to Neutral as Swift SS GP Direction Change GPI, GPI US

Price (30 Jul 26):$296.71

and High Leverage Blunts Relative Revision Trajectory ▼Price Target (Dec-26):$320.00

Prior (Dec-26):$380.00

We move to Neutral from Overweight as a range of cross-currents - slowing P&L

growth, elevated leverage following the Hennessy Automobile acquisition, and

ongoing mean reversion in Texas relative performance - are likely to skew

forward revisions risk to the downside, particularly with UK macro uncertainty

still unresolved.While we continue to view GPI as a best-in-class operator, especially

through this cycle, emerging headwinds in the P&S business threaten to erode the

company’s primary competitive advantage in technician hiring and retention, and the Autos & Auto Parts

absence of broader ancillary initiatives (captive finco/warranty or standalone used), Rajat Gupta AC

also limits the potential for differentiated near-term growth. At ~7x FY2 P/E and (1-212) 622-6382

trading at a ~25% discount to peer average, GPI shares remain relatively inexpensive, rajat.gupta@jpmorgan.com

but the lack of clear upside catalysts, an elevated leverage profile (highest amongst Jash Patwa

peers pro-forma for the transaction), and limited capital deployment flexibility lead (1-212) 622-5472

jash.patwa@jpmchase.com

us to the sidelines. We could look to revisit a more constructive stance should we see

Yash Beswala

renewed growth momentum supported by rebranding, used vehicle sourcing, and

(1-212) 622-0028

P&S initiatives. yash.beswala@jpmchase.com