RBC Capital Markets has slashed its Auto Trader Group PLC (LSE:AUTO) price target to 535p from 830p, arguing that weak revenue momentum and a lack of near-term catalysts leave little room for the shares to rerate.
The broker retained its Sector Perform rating, with the revised target only modestly above Auto Trader’s 515.2p market price.
RBC reduced its FY27 revenue and adjusted EBITDA estimates by 3.5% to £650.6 million and £435.3 million, respectively, reflecting weaker guidance for average revenue per retailer and dealer forecourt numbers.
“We see little by way of catalysts in FY27 to drive upside to ARPR,” analyst Ross Broadfoot said.
Fast vehicle sales remain a particular headwind because dealers have less incentive to pay for premium listing products. RBC noted that overall stock turnover remained around 30 days, while high-demand electric vehicles were selling a week faster than a year earlier.
The broker now values Auto Trader at 10 times forecast FY27 EBITDA, down from 16 times previously following a broader sector derating.
