S&P ups Group 1 outlook to stable

Standard & Poor's said it has revised its outlook on Group 1 Automotive Inc. to stable from negative and affirmed the ratings, including the B+ corporate credit rating.

"The outlook revision reflects its view that Group 1s ability and willingness to stabilize EBITDA margins through aggressive cost initiatives, as well as signs of stabilizing new-vehicle demand, will enable the company's credit profile to become consistent with the current rating during the next year," said S&P credit analyst Nancy Messer.

"We now believe that there is less than a one-in-three chance that we would downgrade the company in the year ahead because we expect Group 1s prospective earnings and cash flow performance to be enhanced by its cost reductions," she continued.

The agency said it continue to view the company's business risk profile as weak and its financial risk profile as highly leveraged.

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