Financial Trading Blog
Stock of the day 07/06/2016 – Auto Trader Group PLC
It is safe to say that Auto Trader had a pretty disastrous start to 2016. Plunging below £4 as January wore on, the stock then dived over 15% in the first fortnight of February as the wider-market turmoil played havoc with its price. That decline left Auto Trader at a 4 month low of £3.31, undoing much of the good work that had seen the stock surge from the £2.65 of its March IPO to £4.44 by the end of 2015.
This was despite a strong update in February which saw Auto Trader state it had experience a stronger than forecast increase in average revenue per retailer forecourt alongside an unexpected rise in margins. This led the company to revise its operating profit targets higher, now anticipated to be between £169 million to £171 million.
(Source: IT-Finance.com 07/06/2016)
A series of ‘Buy’ ratings across March helped the stock graze the £4 march, only for Auto Trader to be put on the downward path once again as April got underway. Yet having fallen as low as £3.57 things started to look up for the classified advertising company, at one point hitting a 4 month high of £4.10. Auto Trader Group sits at a current trading price of £4.07 (IT-Finance.com, 07/06/2016).
In terms of the company’s full year figures on Thursday analysts are expecting a near 10% rise in sales to £280.6 million. The real draw, however, will likely be the company’s stupendous surge in pre-tax profit, from £10.9 million to £149.8 million year-on-year.
Auto Trader Group PLC has a consensus rating of ‘Buy’ with an average target price of £4.35.
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