MOTORCYCLE HOLDINGS LIMITED (MTO)
Share Price Analysis and Chart

03/09/2024

1

Upgrade to Add from Hold

$1.90

17.28%

Motorcycle Holdings reported profit down -39% year on year but up 14% half on half, exceeding Morgans' expectations. Recent acquisitions (primarily Mojo) have continued to offset challenging market conditions in the core business.

The broker notes improving trade conditions through May/June have continued into 1H25, the cost base is stabilising, and margins are expected to improve in FY25.

The broker is encouraged by the cost stability delivered through FY24, market share gains in a cyclically low market, improving performance to start FY25 and clear intent to deleverage the balance sheet.

Despite the recent share price rally, Morgans views Motorcycle Holdings as well placed should industry volumes recover. Target rises to $1.90 from $1.40, upgrade to Add from Hold.

FORECAST
Morgans forecasts a full year FY25 dividend of 11.00 cents and EPS of 21.00 cents.
Morgans forecasts a full year FY26 dividend of 13.00 cents and EPS of 24.00 cents.

09/09/2024

1

Buy

$2.37

46.30%

Motorcycle Holdings reported FY24 results which came in at the upper end of guidance.

Moelis observes revenue met expectations while gross profit margins were slightly lower than anticipated at 26%, against 27% in FY23.

The broker highlights what appears to be some demand recovery post a prolonged period of weakness from Nov 2023 to April 2024, which infers the market might be bottoming.

Management is looking to cost out initiatives for FY25 as well as an improvement in margins.

The analyst lifts EPS forecasts by 20% in FY25 and 30% in FY26. Buy rating unchanged. Target price $2.37.

FORECAST
Moelis forecasts a full year FY25 dividend of 10.40 cents and EPS of 18.90 cents.
Moelis forecasts a full year FY26 dividend of 11.20 cents and EPS of 19.90 cents.