Eagers Automotive has purchased WFM Motors’ ACT dealerships for $205m, after divesting Bill Buckle Auto Group for $92m.
UBS says ACT was the last remaining region for Eagers Automotive to enter and says the Bill Buckle divestment frees capital to enable the company to consolidate its position and expand easyauto 123 into the territory.
The broker believes a return to normalisation of value will depend on supply constraints easing but in the meantime, the acquisition, rationalisation of the property portfolio, M&A prospects and potential contribution from easyauto 123 all count as positives.
FY22-FY24 EPS rise 1% and 3%. Buy rating and $18.35 target price retained.
Sector: Retailing.
Target price is $18.35.Current Price is $14.07. Difference: $4.28 – (brackets indicate current price is over target). If APE meets the UBS target it will return approximately 23% (excluding dividends, fees and charges – negative figures indicate an expected loss).
