FleetPartners Group Ltd (ASX: FPR) shares are trading 3% higher in morning trade on Friday after it was confirmed Mitsubishi Motors has acquired a 5% stake in the company.
The Japanese automotive giant announced on Monday that it has acquired the position in FleetPartners to expand its sales presence in Australia.
The ASX All Ords stock is up 36% in the last 12 months and is currently swapping hands at $3.59 per share. Let's take a look.
Mitsubishi likes this ASX All Ords stock
FleetPartners shares hit the headlines this week after Mitsubishi Motors acquired a 5% stake in the company on 19 June 2024.
Founded in 1987, the FleetPartners boasts a fleet of around 90,000 vehicles. The ASX All Ords stock provides fleet management services to corporations in Australia and New Zealand.
The automotive player's move is said to align with its strategy to expand business operations in Australia. Mitsubishi Executive Tatsuo Nakamura said Australia is a key zone for the company's growth plans.
Australia is one of our core markets, and we have made this investment to further expand our sales channels and business opportunities in the country. We look forward to working with FleetPartners to grow our businesses.
Meanwhile, FleetPartners' CEO Damian Berrell said he wasn't against market consolidation as long as it benefitted the ASX All Ords stock.
"We're a strong supporter of market consolidation and would be open to any form of market consolidation provided that it's accretive to our investors and the synergies would certainly justify it," Berrell said, according to The Australian Financial Review.
Analysts at MST Marquee originally fuelled speculation about potential acquisition activity. The firm argued that SmartGroup Corporation Ltd (ASX: SIQ) could merge with FleetPartners at a 10-15% premium.
It said such a merger could deliver "earnings accretion of 20%," per the AFR. As to today's announcement, there is no saying what it means for FleetPartners' fundamentals.
Despite recent market fluctuations, analysts remain optimistic about FleetPartners. Morgan Stanley recently increased its price target on the stock to $3.90 per share.
According to my colleague Bernd, the broker maintains an 'overweight' rating on the ASX All Ords stock. This suggests an 11% upside from current levels.
The consensus of analyst estimates on FleetPartners is a buy according to CommSec. There is 1 sell and 1 hold rating against 4 buy recommendations.
Foolish takeaway
Mitsubishi's investment has focused attention on this ASX All Ords stock. Many investors are questioning what this means for growth in the vehicle leasing sector.
In the last 12 months, FleetPartners shares are up 36%. This is ahead of the S&P ASX 200 Index (ASX: XJO) by more than 28% in that time.
