CAR Group Ltd

CAR: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$53.00	Mpvrgh	Cxmzwlscn

Carsales.com Remains Undervalued Despite Fair Value Estimate Reduction

Apr 27, 2020

We have cut our earnings forecasts for narrow-moat-rated Carsales.com and now expect fiscal 2020 underlying NPAT to fall by 22% to AUD 101 million, versus our previous 4% growth forecast. Although Carsales.com’s first-half result was impressive, the earnings impact in the second half of fiscal 2020 and early fiscal 2021 from the coronavirus-related economic downturn is likely to be severe and we expect second half fiscal 2020 underlying NPAT to be 37% below the previous corresponding period, or pcp.

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