Why the Eagers Automotive (ASX:APE) share price lifted today

The Eagers Automotive Ltd (ASX: APE) share price rose today after the company provided investors with an update on the sale of one of its assets.

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The Eagers Automotive Ltd (ASX: APE) share price is in the green today, while the most of the ASX is firmly in the red. This comes after the company provided an update on the sale of its Daimler operations.

The automotive company’s shares closed today’s trade at $15.66, up 1.62%. In comparison, the S&P/ASX 200 Index (ASX: XJO) is sitting at 7,025 points, down 0.8%.

What did Eagers announce?

Investors pushed the Eagers Automotive share price higher after digesting the latest news from the company.

In its announcement, Eagers Automotive advised it has completed the sale of its Daimler Truck Operations to Velocity Vehicle Group.

Based in the United States, Velocity Vehicle Group operates as an automotive retailer. The group provides aftermarket parts and services for trucks, diesel engines and transmissions. In addition, the company offers rental and leasing services to its customers across California, Hawaii and Arizona.

Eagers Automotive also noted that the sale of the Milperra property to Velocity Vehicle Group remains on track. It is expected that the transaction will be completed sometime within the first half of this year.

Eagers Automotive estimates it will receive roughly $108 million from both sales. Profit before tax is forecasted to come in between $32 million and $36 million. This excludes transaction costs and the impact of AASB16 leases, while subject to external audit and final adjustments.

Eagers Automotive share price summary

The Eagers Automotive share price has been charging higher over the past 12 months, up more than 200%. Surprisingly, the company has performed well despite COVID-19 affecting the automotive market and supply chain logistics.

It’s worth noting that the Eagers Automotive shares are within reach of their all-time high of $17.67 achieved earlier this month.

Based on today’s share price, Eagers Automotive has a market capitalisation of around $4 billion, with 256.9 million shares outstanding.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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