UK investment bank Barclays has upped its target price for FTSE 250 car retailer Auto Trader Group PLC (LON:AUTO) but also downgraded the stock to ‘Equal Weight’ from ‘Overweight’ due to a lack of upside.
In a note to clients, analysts said factors that could impact the company’s earnings forecasts (such as used car transaction volumes and competition) had not gone away but were better understood following a “reassuring” set of results in June.
READ: Auto Trader reports solid final results but predicts continued decline in car market
However, despite the more positive numbers, the bank said it expected forecasts to trend up modestly through the financial year but with no “major upgrades”.
As a result of the slightly more positive forecasts, analysts upped the target to 460p from 435p but saw little upside remaining to justify the retention of an ‘Overweight’ rating.
In its full-year results in June, Auto Trader reported that pre-tax profits had risen 10% to £210mln in its full-year results, with revenues rising 7% to £330.1mln.
However, the firm also said it expected economic uncertainty to continually impact private car listings in addition to a general decline in the UK’s new and used car markets.
In late afternoon trading, Auto Trader shares were down 0.8% at 462.4p.