Citi analyst Sam Teeger has downgraded Bapcor to a ‘sell’ rating, highlighting persistent execution risks despite the company’s seemingly simple business model. Bapcor operates in the automotive aftermarket, supplying parts and services to the trade and retail sectors. The company aims to be the leading provider in its market, offering an extensive range of products and services.
Teeger pointed out that three previous chief executives have attempted to steer a turnaround without success. Citi is waiting for tangible and sustained evidence of progress before recommending the stock to investors. ‘While Bapcor should be a relatively simple business and the industry structure is reasonable, from our perspective after three false starts from different CEOs trying to execute a Bapcor turnaround, we think it is prudent to wait to see some sustained signs of traction prior to recommending that investors buy the stock,’ Teeger stated.
In addition to execution concerns, Citi flagged potential challenges to Bapcor’s working capital targets. The analyst noted that increased competition from Bunnings’ Auto 2.0 rollout and Super Cheap Auto’s continued store expansions could impede inventory improvements, further pressuring the company’s financial performance.
As a result of these factors, Citi has substantially reduced its earnings forecasts for Bapcor. The firm cut its 2025-26 EBITDA forecast by 20 per cent to $159 million, with projections for 2026-27 and 2027-28 also lowered. Furthermore, following a recent equity raise, Citi slashed its target price for Bapcor by 45 per cent to $1.25, reflecting the diluted earnings per share.
