BMO Capital analyst Tamy Chen upgraded the rating on AutoCanada to a Buy yesterday, setting a price target of C$40.00.
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Tamy Chen has given her Buy rating due to a combination of factors that highlight AutoCanada’s improved financial performance and strategic execution. The company has shown two consecutive quarters of significantly better results, which provide confidence in its cost-reduction initiatives. This improved performance is largely attributed to better gross profit across various segments and a disciplined approach to cost management, leading to increased profitability.
Furthermore, Chen anticipates continued growth potential as AutoCanada shifts its focus back to volume expansion while maintaining cost discipline. The company is also expected to resume acquisitions of dealerships, which should enhance both top-line growth and margins by applying its refined cost structure and operational practices. Despite the recent stock price increase, the valuation remains reasonable, with a target price set at $40 based on a 6.5x multiple of the projected 2026 EBITDA, aligning with historical valuation ranges.
Based on the recent corporate insider activity of 26 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of ACQ in relation to earlier this year.