CAR Group Ltd

CAR: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$56.00	Snmcyj	Gvgcqcfpr

Carsales.com Remains Undervalued Following Market Over-reaction to 1H Result

Feb 13, 2019

We have maintained our fair value estimate for narrow-moat-rated Carsales.com at AUD 14.50 per share following its weak first-half result. At the current market price of AUD 11.52, we continue to believe the shares are undervalued and that the market is underestimating the potential of the international businesses and the resilience of the core Australian businesses. The market price implies a fiscal 2019 price/earnings ratio of 22, versus 27 at our fair value, and a dividend yield of 3.9%, or 5.6% including franking credits.

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