Via a series of acquisitions, AMA Group has become the key consolidator and largest player in the fragmented Aust panel beating industry. The industry is undergoing major change, the broker notes, though consolidation, the closure of smaller players and a preference from insurers to use larger players.
A similar process has already begun playing out in the US and UK and the broker sees Australia following the same path. On a solid growth profile, the broker initiates coverage of AMA with a Buy rating and $1.25 target.
Target price is $1.25.Current Price is $0.92. Difference: $0.34 – (brackets indicate current price is over target). If AMA meets the UBS target it will return approximately 27% (excluding dividends, fees and charges – negative figures indicate an expected loss).