Morgans expects medium-term earnings will be better than the current valuation for Eagers Automotive implies. The target price, lowered to $14.40 from $16.70, is still well in advance of the current share price and the Add rating is retained.
The broker feels the market is being very cautious around consumer demand though notes forward indicators (including a 25% increase in the order book) have remained strong for 2022 to-date.
The analyst believes changing industry dynamics will support scale operators such as Eagers Automotive over the long term.
Sector: Retailing.
Target price is $14.40.Current Price is $10.74. Difference: $3.66 – (brackets indicate current price is over target). If APE meets the Morgans target it will return approximately 25% (excluding dividends, fees and charges – negative figures indicate an expected loss).
