Eagers Automotive Ltd (ASX: APE) shares have been on form over the past 12 months.
During this time, the ASX 200 share has risen by a sizeable 33%.
As a comparison, the S&P/ASX 200 Index (ASX: XJO) is up 3.8% over the same period.
Can the auto retailer's shares continue to rise? Let's see if Bell Potter rates the company as a buy, hold, or sell.
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What is the broker saying?
Bell Potter notes that the company has held its annual general meeting this week and provided a trading update.
The broker was relatively pleased with what the ASX 200 share reported. It said:
Eagers held its AGM today and as usual provided a four month trading update to the end of April. The key points were: 1. Turnover is up c.5% on pcp; 2. Order intake is at record levels and orders taken in the first four months have exceeded deliveries by 29%; and 3. The independent used car businesses of easyauto123 and Carlins have had a record start to the year with PBT up 40% on pcp.
The company also provided an outlook for 1H2026 and said it expects underlying operating PBT for the core business (i.e. Australia and New Zealand) to be "in line with, or slightly ahead of" 1H2025. On top of this there will be two months contribution from CanadaOne Auto and this will result in "a record first half at a consolidated level". Eagers then also said the outlook for 2H2026 is positive with an expected uplift in deliveries, supported by improved Toyota supply. The second half will also benefit from a full six month contribution from CanadaOne and positions the company "for a record year in 2026".
The broker has reduced its earnings estimates slightly, due to "a 1-2% reduction in our revenue forecasts and also a modest decrease in our margin assumptions."
Should you buy this ASX 200 share?
According to the note, the broker has responded to the update by retaining its buy rating on Eagers Automotive shares with a trimmed price target of $28.75.
Based on its current share price of $22.76, this implies potential upside of 26% for investors over the next 12 months.
In addition, a 3.5% dividend yield is expected over the period, boosting the total potential return to almost 30%.
Commenting on its recommendation, Bell Potter said:
There are no changes in the key assumptions we apply in each of the valuations used to determine our target price – 22.5x and 7.5x multiples in the PE ratio and EV/EBITDA and an 8.7% WACC in the DCF. The net result is a 2% decrease in our target price to $28.75 which has been driven by the earnings downgrades. This is still >15% premium to the share price so we maintain our BUY recommendation. Focus now perhaps shifts to vehicle deliveries in May and June – May should be out late next week – given these are two of the biggest months of the year and, as Eagers said, the company generates 20-25% of full year profit in these two months.
