It's fair to say investors weren't too excited by Amotiv Ltd (ASX: AOV)'s results released earlier this week, with the company's shares drifting lower since they were announced.
That might not be much of a surprise, as the results were fairly unremarkable: revenue grew just 3.3% for the half compared with the same period the previous year, and underlying net profit was 1.3% higher at $59.7 million.
In the 4WD accessories and trailering division, revenue was up 5.5% to $189.6 million, while underlying EBITDA fell 15.2% to $26.2 million.
The lighting, power and electrical division grew its profit by 9.4% to $37.1 million, while the powertrain and undercar division grew earnings by 6.7% to $39.9 million.
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Where to from here?
On the all-important outlook, the company said its guidance was unchanged, with group revenue growth expected – albeit no specific figure given – and underlying EBITA of about $195 million, "in what is likely to remain a challenging environment''.
So what did the analysts think of the result? We've had a look at three research notes published since the results were announced, and they're quietly confident that Amotiv shares will perform well over the next 12 months.
Firstly, UBS, which has a price target of $11.40 on the stock, upgraded from $11 following the results release.
UBS said it was a credible result, and "better than feared" given the challenging consumer environment and cost inflation.
They added:
New contract wins and geographic diversification, along with solid cost control (Amotiv Unified program) helped offset some 1H26 headwinds. Looking to 2H26, pricing increases and further cost benefits should help offset potentially more challenging conditions in 4WD. We see risk of further deterioration within new car sales (especially on further interest rate increases), which we have partly factored in.
They noted that management was also targeting a $5 million cost reduction program.
On the current share price, which was $7.62 at the time of writing this article, they said, "we continue to see valuation as undemanding''.
Over at Morgans, the analyst team has downgraded Amotiv from a buy rating to accumulate, noting that their profit report was in line with expectations.
They added:
Whilst we view the valuation as undemanding (about 9.5x PE), we see limited near-term catalysts for the stock to re-rate and expect patience will be required as offshore investments are realised.
Morgans has a price target of $9.15 on the stock.
And finally, over at Macquarie, the team there has a bullish share price target of $11.90 on Amotiv shares.
They said the result was "solid despite soft new vehicle sales, which had created downside risk concerns in the market''.
They said they saw several tailwinds, especially out to FY27, "including further successful execution of the offshore growth strategy''.
