Panmure Liberum has downgraded Autotrader Group (LSE:AUTO) to Hold, from Buy, and cut its price target to 420p from 830p, whilst pointing to 'the product roadmap' as the decisive issue for the UK online automotive marketplace.
Sean Kealy says
The aftermath of the “disastrous” Deal Builder rollout has been worse than expected, analyst Sean Kealy said, and, said it leaves Autotrader reliant on a recovery in paying retailer customers and successful new product development to restore confidence and growth.
The house now models 1% underlying top-line growth in FY27 with H2-weighted EBIT growth of 1.2%, trims FY27 EPS by 3% (while nudging FY28 EPS up 2%), notes the c.£270m H2 buyback and a further c.£500m commitment for FY27, and values the stock on a 10% FCF yield that underpins the 420p target.
Panmure flags successful new product development and a clear recovery in retailer spending as the critical near-term catalysts before Deal Builder can be expected to contribute materially to revenue and profit.
