Morgans lifts its EPS forecasts for FY21-FY23 by 10%, 20% and 20%, respectively, and raises its price target for Eagers Automotive to $19.20 from $1.39. This comes as the company is set to deliver first half profit (NPBT) 11% above the broker’s forecast.
The analyst sees an increased likelihood of structurally higher margins, underpinned by an entrenched cost-out and other drivers. These are considered to include EA123 (online used cars), M&A, property buybacks and increasing penetration of Finance and Insurance.
Sector: Retailing.
Target price is $19.20.Current Price is $15.99. Difference: $3.21 – (brackets indicate current price is over target). If APE meets the Morgans target it will return approximately 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).
