ASX 200 stock Eagers Automotive Ltd (ASX: APE) has been a standout performer this year.
Eagers Automotive is a leading Australian and New Zealand automotive retail group that represents a diversified portfolio of automotive brands. After acquiring Automotive Holdings Group in 2019, the company has become Australia's largest car dealership business.
Last week, the consumer discretionary company delivered its most recent half-year results.
Investors liked what they saw, sending its share price 12% higher that day.
Let's recap what happened.
Image source: Getty Images
Eagers soars on blockbuster result
In the most recent half, the ASX 200 stock posted an 18.9% revenue increase to $6.5 billion.
This allowed the company to deliver its full-year guidance of $1.0 billion revenue growth in the first half alone.
Growth was driven by strong performance from its core business, acquisitions, and the rapid growth of Chinese electric vehicle maker BYD.
Eagers also expanded its market share during the half. For new vehicles, it now accounts for 13.8% of market share, up from 11.1% in the prior equivalent half.
Management now expects to deliver $13 billion in full-year revenue.
Eagers also generated record operating profit of $197.7 million, which was 8.3% higher than the prior corresponding period.
Is Eagers Automotive still a buy?
Following these impressive numbers, the key question for investors is whether the ASX 200 company is still attractively valued.
Since its result last Thursday, Eagers has risen even further, closing at $27.65 on Friday. That's just below its all-time high of $27.70, also reached on Friday.
After reviewing its most recent result, Macquarie Group Ltd (ASX: MQG) released a research note on 29 August.
The broker liked what it saw, describing the revenue number as a 'material beat'.
Macquarie also said, as a beneficiary of rate cuts, Eagers is likely entering an earnings upgrade cycle, noting:
APE is a large beneficiary of rate cuts with every -25bps representing c$6.5m of UPBT, and likely to improve demand. We expect demand could outstrip supply in 2H25, with APE's 1H25 order write +10% above deliveries.
Accordingly, Macquarie increased its price target on Eagers shares by 33% from $20.60 to $27.33.
At the time the research note was published, Eagers Automotive shares sat around 12% below this target, warranting an 'outperform' rating from the broker.
However, after strong share price action on Friday, Eagers Automotive shares are now trading above this price target.
Foolish Takeaway
Eagers Automotive has been one of the best-performing consumer discretionary stocks this year. The ASX 200 stock got a further boost last week when the company released a favourable half-year result. However, after such strong share price action, broker Macquarie's price target suggests the company is fully valued. Those interested in Eagers Automotive shares should place the ASX 200 stock on their watchlist and wait for a more favourable entry point.
