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APE: Equity Raise Will Support Stronger Long Term Revenue Outlook

Urbanization And Digital Retail Will Boost Auto Sales In Australasia

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APE
AnalystHighTarget
Not Invested
Published 01 Aug 2025

Update shared on 13 Dec 2025

Fair value Increased 25%
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AnalystHighTarget's Fair Value
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1Y
105.5%
7D
-6.4%

Analysts have raised their price target for Eagers Automotive from 28.62 dollars to 35.90 dollars, citing a materially stronger outlook for revenue growth that more than offsets a slightly lower profit margin and a reduced future price to earnings multiple.

What's in the News

  • Eagers Automotive has completed a follow on equity offering totaling approximately AUD 631 million, issuing multiple tranches of ordinary shares at offer prices of AUD 21 and AUD 18 per share. This included a rights offering followed by a direct listing (Key Developments).
  • The company has filed an additional follow on equity offering of about AUD 502 million, primarily through rights offering structures, further expanding its ordinary share base at offer prices of AUD 21 and AUD 18 per share (Key Developments).
  • Eagers Automotive entered into a strategic partnership agreement to issue common shares, bringing in Mitsubishi Corporation as a new investor through a private placement (Key Developments).

Valuation Changes

  • Fair Value: Raised from A$28.62 to A$35.90, a substantial upward revision that reflects a stronger long term outlook.
  • Discount Rate: Increased slightly from 8.81 percent to 9.16 percent, which signals a modestly higher required return on equity.
  • Revenue Growth: Upgraded significantly from 9.26 percent to 31.32 percent, which indicates a materially more optimistic view on top line expansion.
  • Net Profit Margin: Trimmed slightly from 2.50 percent to 2.33 percent, which reflects expectations of somewhat higher cost pressures or mix effects.
  • Future P/E: Reduced from 23.83 times to 18.64 times, which implies a lower valuation multiple applied to higher projected earnings.

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