JPMorgan downgrades Auto Trader to ‘underweight’

(Sharecast News) – JPMorgan Cazenove downgraded Auto Trader on Tuesday to ‘underweight’ from ‘neutral’ and cut the price target to 555p from 630p as it pointed to easing momentum in the core business and an unattractive valuation.
The bank argued that Retailer revenue momentum will likely slow, putting downside risk to consensus estimates for flat forecourts, and said it expects upselling and ad-on products to evolve at a slower pace.

It also said that stress testing new Digital Retailing initiatives – Deal Builder/Autorama – it concludes meaningful scale (at least 20% uplift to group profits) would require “rather stretched” assumptions.

JPM also pointed out the shares have now closed the valuation gap to peers and said the relative valuation is unattractive.

“With our estimates 5% and 7% below consensus on FY25/26E adjusted EPS and lack of catalysts, we see (far) better value elsewhere in Classifieds,” it said. JPM favours overweight rated Scout24 and Adevinta.

At 0900 BST, Auto Trader shares were down 3.6% at 626.40p.

Related Articles

Sign up to the Wealth DFM Newsletter

Please enable JavaScript in your browser to complete this form.
Name

Trending Articles

IFA Talk logo

IFA Talk is our flagship podcast, that fits perfectly into your busy life, bringing the latest insight, analysis, news and interviews to you, wherever you are.

IFA Talk Podcast – listen to the latest episode

Wealth DFM
Privacy Overview

This policy explains how IFA Magazine collects, stores use, and shares personal information (including but not limited to information from which you can be personally identified such as your name, address, job title, company, email address, or telephone number) and information about your visits to the network, including the pages you view, the links you click and other actions taken in connection with www.ifamagazine.com, www.gbinvestments.co.uk, www.robopromedia.com, www.mvpromedia.com.

IFA Magazine Publications Limited may update this Policy at any time. It is your responsibility to check for updates to this Policy, as your continued use of the website denotes an acceptance of this Policy. Unless stated otherwise, IFA Magazine Publications Limited’s current Policy applies to all information that IFA Magazine Publications Limited has about you and your account.