Here's why the Bapcor share price is popping 6% today

Bapcor shareholders are celebrating today.

| More on:
Two men cheer in four wheel drive

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's been a shaky, but overall positive, start to the trading week for the S&P/ASX 200 Index (ASX: XJO) and most ASX shares so far this Monday. At the time of writing, the ASX 200 has gained a decent 0.31%, despite dipping into negative territory a few times this morning. But let's talk about what's going on with the Bapcor Ltd (ASX: BAP) share price.

Bapcor shares are having a day to remember today. The automotive parts manufacturer closed at $5.27 a share last week. Bapcor may have opened lower at $5.12 a share this morning, but the company is currently up a rosy 6.74% at present to $5.62.

So what's going on today that has seen Bapcor shares rise so enthusiastically, especially on a day of very mild gains for the broader market?

Well, it looks like a trading update from the company this morning that was released before market open is responsible for this pleasing rise.

Bapcor shares spike on half-year trading update

The update that Bapcor released this morning covered the company's preliminary, unaudited performance over the six months to 31 December 2023 (1H24).

For this period, Bapcor has reported that it was able to bring in $1,018 million in revenue. That's a 2% rise over the $1,001 million that the company reported for the same period in 2022 (1H23).

In terms of pro-forma earnings before interest, tax, depreciation and amortisation (EBITDA), Bapcor is flagging a range of $142 million and $144 million. That would be between a 1% and a 3% fall on 1H23's $146 million.

For net profits after tax (NPAT), Bapcor is expecting to book a net profit in the $53 million to $54 million range. Again, that would represent a 13% to 15% drop from 1H23's $62 million.

Bapcor blamed the falls in earnings on its retail segment (where revenues were down 3%). The company stated that its retail segment was "negatively impacted by a decline in consumer confidence which reduced discretionary spending as well as lower fitment and installation volumes in some categories such as bull bars and roof racks".

Bapcor also highlighted that higher interest rates led to financing costs rising by $7 million over the half against 1H23.

Due to these pressures, the company has committed to additional cost savings measures over the second half of the current 2024 financial year.

Bapcor CEO Noel Meehan added the following:

The first half result reflects the strength and ongoing profitable growth in our Trade and Wholesale businesses.

Having said that, the results were disappointing due to general macroeconomic headwinds which have impacted our Retail business, as well as increased cost of doing business inflation and higher interest rates.

The actions underway to improve our operational performance and the initial benefits from our transformation program are providing us with confidence going into 2H24.

Bapcor share price snapshot

Today's share price moves will be very welcome for Bapcor shareholders, who have endured some hefty losses over recent months.

Even after today's significant gains, Bapcor shares remain down by 11.9% over the past 12 months, and down more than 20% since September 2023. The company has also gone nowhere over the past five years, losing a little over 8% since January 2019.

At the current Bapcor share price, this ASX 200 stock has a market capitalisation of $1.78 billion, with a trailing dividend yield of 3.95%.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Bapcor. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Consumer Staples & Discretionary Shares

Confused African-American girls in casual clothing standing outdoors and comparing information on smartphones.
Consumer Staples & Discretionary Shares

4 reasons to buy GYG shares (and one reason to sell)

After a successful IPO, where to next for investors?

Read more »

Man smiling at a laptop because of a rising share price.
Consumer Staples & Discretionary Shares

Top broker slaps $33 price target on Guzman y Gomez (GYG) shares

One broker thinks the Mexican food business has spicy growth potential.

Read more »

A woman carries a stack of boxes along a street after a big day of shopping
Share Market News

Here's how the ASX 200 market sectors stacked up last week

Consumer discretionary shares led the ASX 200 market sectors last week with a 3.81% gain.

Read more »

a man inspects a capsicum while holding an eco-friendly green string bag in a supermarket produce aisle.
Consumer Staples & Discretionary Shares

Up 12% from 52-week lows, is Woolworths stock still a buy?

Should investors be interested in this supermarket giant?

Read more »

dairy asx share price represented by grandfather and grandson both drinking glasses of milk
Consumer Staples & Discretionary Shares

Here's why A2 Milk shares soared in FY24. Will it happen again?

It turned out to be a stellar year for the milk company's shareholders.

Read more »

A young man sitting at an outside table uses a card to pay for his online shopping.
Consumer Staples & Discretionary Shares

Why did ASX retail shares rise 19% in FY24 amid a cost of living crisis?

David Rumbens, a partner at Deloitte Access Economics, has an answer to this question.

Read more »

smiling child drinking milk from a glass, A2 milk share price rise, increase, up, A2 sales to china
Consumer Staples & Discretionary Shares

A2 Milk shares lift amid backing for $130 million Synlait loan

A2 Milk is throwing its support behind the $130 million Synlait shareholder loan.

Read more »

A smiling man take a big bite out of a burrito
Consumer Staples & Discretionary Shares

Here's what ASX brokers are saying about Guzman y Gomez shares right now

These ASX brokers are united on where GYG shares are going next.

Read more »