Eagers Automotive Ltd
APE: XASX (AUS)
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
A$77.80 | Vnvck | Zngcpldwx |
Eagers Automotive Enjoys Superior Size and Scale Over Smaller Competitors
Business Strategy and Outlook
We expect competitively advantaged Eagers Automotive to return to EPS growth in 2021 following a challenging year for auto sales in 2020. Despite being the first full year of earnings following the merger with Automotive Holdings, we expect earnings per share to decline in 2020 as coronavirus-induced shutdowns weigh on new-vehicle sales. However, we do not expect these headwinds to prove protracted. We forecast new-vehicle sales to pick up again in 2021, leading to a five-year EPS CAGR of 17%.