Ahead Of The Bell: Group 1 Automotive

NEW YORK (AP) — A Wachovia analyst downgraded Group 1 Automotive Inc. Wednesday, noting that shares of the auto dealer have risen faster than the broader market.

In a note to investors, Richard Kwas cut his rating on the auto retailer to "Market Perform" from "Outperform." He had upgraded Group 1 to "Outperform" in late February due to its reduced debt load. That day, shares closed up 30 percent at $9.64.

On Tuesday, the Houston-based company's stock closed at $25.22. Shares are up about 250 percent from their February low, while the broader S&P 500 has risen 23 percent since then.

Kwas said he expects the company to capitalize on likely dealer consolidations. General Motors Corp. and Chrysler LLC are seeking to cut contracts with significant chunks of their dealers as they go through bankruptcy protection proceedings.

"Management is doing a solid job of positioning the company for the long term," he said, commending the company's "high earnings quality."