Bapcor: Discretionary Weakness Weighs on Autobarn's Near Term, but Long-Term Dynamics Intact

We think pessimism around Bapcor is too focussed on the weak near-term outlook, overlooking the strong underlying dynamics in automotive spare parts. We lower our near-term earnings forecasts, but the cut is immaterial to our unchanged AUD 8.00 fair value estimate as we make no material changes to our long-term forecasts. We expect Bapcor to continue to capture share from the long tail of smaller competitors by distributing a wider range of spare parts quicker, more reliably, and at a lower cost—competitive advantages that furnish the firm with a narrow economic moat.