In a report released yesterday, Ed Young from Morgan Stanley maintained a Sell rating on Auto Trader, with a price target of p710.00.
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Ed Young has given his Sell rating due to a combination of factors surrounding Auto Trader’s current market position and strategic outlook. Despite the company’s confidence in integrating AI technologies, such as the OpenAI SDK, and maintaining a robust technology investment, there are concerns about the potential disruption from agentic AI at the top of the sales funnel. This disruption is perceived as marginal by management, but it still poses a risk that could impact Auto Trader’s operations.
Additionally, while Auto Trader’s management remains optimistic about their margin profile and the company’s ability to sustain or grow margins, the upcoming changes in package structure and the introduction of AI-driven tools like “Buying Signals” could introduce uncertainties. These factors, combined with the company’s current market valuation, have led Ed Young to conclude that a Sell rating is appropriate, reflecting a cautious stance on the company’s future performance.
According to TipRanks, Young is a 4-star analyst with an average return of 11.0% and a 49.54% success rate. Young covers the Consumer Cyclical sector, focusing on stocks such as Flutter Entertainment PLC, Lottomatica Group S.P.A., and Trainline.
In another report released on November 7, J.P. Morgan also reiterated a Sell rating on the stock with a p770.00 price target.