Weekly Reports | 10:30 AM
A summary of the highlights from Broker Call Extra updates throughout the week past.
Broker Rating Changes (Post Thursday Last Week)
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EAGERS AUTOMOTIVE LIMITED ((APE)) Downgrade to Hold from Buy by Moelis.B/H/S: 0/0/0
Moelis lowers its rating for Eagers Automotive to Hold from Buy with its target price decreased to $17.83 following a trading update that revealed industry oversupply is crunching margins.
The analyst notes that recent guidance represents a -17% downgrade to estimates, driven by gross profit margin compression in the domestic business, higher interest costs, and acquisition dilution.
Moelis observes that legacy brands in Australia face severe margin pressure from excess inventory, weaker consumer sentiment, and increased competition from newer Chinese original equipment manufacturers.
Despite these headwinds, Moelis highlights that CanadaOne Auto continues to outperform and believes difficult market conditions will ultimately drive industry consolidation.
SMARTGROUP CORPORATION LIMITED ((SIQ)) Downgrade to Hold from Buy by Canaccord Genuity.B/H/S: 0/0/0
Canaccord Genuity maintains a Hold rating for Smartgroup Corp with its target price increased to $11.20 from $10.90 after a trading update showed robust industry tailwinds.
Management reported a 31% increase in third-quarter settlements and a 33% rise in orders year-on-year, guiding to FY26 NPATA of $92m to $94m.
The strong performance was supported by the removal of the fuel excise discount and the BEV FBT exemption, driving a sharp increase in retail fuel prices and subsequent demand.
Despite these volume and yield improvements, management indicated that second-half margins will remain flat with the first half, lacking the typical seasonal skew due to additional operational investments intended to drive future revenue programs.
The analyst upgrades FY26 EPS estimates by 3.9% but anticipates a modest revenue decline in FY27 as the company cycles extraordinary demand and faces the first-stage reduction of the BEV FBT exemption in March 2027.
| Order | Company | New Rating | Old Rating | Broker | |
|---|---|---|---|---|---|
| Downgrade | |||||
| 1 | EAGERS AUTOMOTIVE LIMITED | Neutral | Buy | Moelis | |
| 2 | SMARTGROUP CORPORATION LIMITED | Neutral | Buy | Canaccord Genuity | |
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