RBC Capital Markets lowers target price on Auto Trader

(Sharecast News) - Analysts at RBC Capital Markets cut their price target on Auto Trader from 830p to 535p on Friday, saying weaker prospects for average revenue per retailer (ARPR) in FY27 leave few catalysts for upside. RBC Capital said it had updated its model after Auto Trader's FY26 results, downgrading estimates in line with consensus and keeping a 'sector perform' rating on the stock.

With FY27 pricing already set and the group's revised guidance in place, RBC sees limited scope for ARPR growth this year.

Looking ahead to FY28, RBC said pricing growth of 5% for FY27 was well below last year's roughly 8%, but a more stable cost backdrop for dealers and a more benign stock‑turn cycle could allow pricing to recover.

The Canadian bank noted that market dynamics remain challenging. While new‑car registrations rose 11.4% in June, the used car market continues to work against Auto Trader. Overall market turn held at 30 days, but electric vehicles - the highest‑demand category - were reportedly selling a week faster than a year ago.

RBC cut its FY27 and outer‑year forecasts and now values the group at 10x FY27 underlying earnings, down from 16x previously after a sector de‑rating.





Reporting by Iain Gilbert at Sharecast.com