Citi is increasingly concerned about the sustainability of the current new car sales momentum given industry articles indicate new car orders are down significantly in lockdown areas. Also, auto manufacturers continue to be impacted by semi-conductor supply issues.
The broker upgrades to Buy from Neutral, as this should be a tailwind once lockdown restrictions are lifted. The target price remains at $12.30. Following a recent share price decline it’s thought the significant discount to peer Bapcor ((BAP)) is excessive.
Sector: Consumer Durables & Apparel.
Target price is $12.30.Current Price is $10.74. Difference: $1.56 – (brackets indicate current price is over target). If GUD meets the Citi target it will return approximately 13% (excluding dividends, fees and charges – negative figures indicate an expected loss).