Bapcor Ltd
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
A$7.80 | Hgygmqb | Kwglcqrt |
Bapcor: Pessimism Overblown Amid Temporary Slowdown
Shares in narrow-moat Bapcor screen materially undervalued amid both short-term headwinds and structural changes facing the automotive industry. A slowdown in discretionary spending weighs on retail near term, new management still needs to prove itself, and the proliferation of electric vehicles, or EVs, is a long-term obstacle for the trade business. However, we think near-term pessimism overlooks fundamental resilience in automotive spare parts, and Bapcor is likely to successfully adapt to the gradual technological transition. Our AUD 8 fair value estimate stands.