Group 1's Third Quarter Fights Back Currency Translation Headwinds From Strong Dollar

Group 1 reported a robust third quarter despite the strong dollar against the pound creating translation headwinds for the U.K. business. Adjusted diluted EPS of $12.00 rose 27.1% year over year and beat the Refinitiv consensus of $11.30. We are raising our fair value estimate to $230 per share from $221 to reflect the time value of money and a lower share count. We like that management is repurchasing stock below our fair value estimate. Group 1 has bought back $459.6 million of shares this year through Oct. 25 and repurchased over 20% of its stock in the past 12 months. The authorization has $64.1 million remaining, but we would not be surprised to see a new authorization announced in the fourth quarter as retiring CEO Earl Hesterberg said on the call that more buybacks are likely.