Cautious Outlook and Profit Concerns Lead to Sell Rating for Auto Trader

Lara Simpson, an analyst from J.P. Morgan, maintained the Sell rating on Auto Trader (AUTO – Research Report). The associated price target remains the same with p746.00.

Lara Simpson has given her Sell rating due to a combination of factors surrounding Auto Trader’s financial outlook and market performance. The company’s recent fiscal year results showed a slight miss in revenue expectations, although operating profit met projections. However, the guidance for FY26 appears cautious, with anticipated challenges in maintaining stock levels and product performance, which could lead to a mid-single-digit percentage reduction in consensus operating profit.
Furthermore, despite a recent rise in the share price, there are concerns about the sustainability of the stock’s valuation given the expected downgrades and the cautious outlook. The company’s strategic move to integrate Deal Builder into its core advertising proposition is seen as a positive step, but it may not be enough to offset the broader concerns about future growth and profitability. These factors collectively contribute to the Sell rating, reflecting skepticism about the company’s ability to meet market expectations in the near term.