Credit Suisse has observed that used car prices appear to be staying stronger for longer, with the market predicating new car supply will not normalise before year end. Eclipx Group continues to benefit from elevated end-of-lease income in the interim.
The company recorded a record high end-of-lease income average of $7,564 per unit in the quarter. Further, the order pipeline remains at an all-time high, with new business writings up 10% on the previous comparable period in the first quarter.
The Outperform rating is retained and the target price increases to $2.95 from $2.90.
Sector: Diversified Financials.
Target price is $2.90.Current Price is $2.23. Difference: $0.67 – (brackets indicate current price is over target). If ECX meets the Credit Suisse target it will return approximately 23% (excluding dividends, fees and charges – negative figures indicate an expected loss).
