HSBC cuts Auto1 to 'hold' from 'buy', sees lack of Q3 momentum
03/08/2023 14:37
** HSBC cuts the German online used-car seller Auto1
AG1G.DE to "hold" from "buy" as it sees negative risk-reward
balance for Q3 results
** The broker says Q2 results on Wednesday did not
demonstrate "fine balance between growth and profitability,"
when group sales, units missed consensus by about 9%
** Still, with EUR 5 mln adj. EBITDA consensus beat (EUR 15
mln vs expected EUR 20 mln), the company is on track to adj.
EBITDA break-even guided for Q4
** The broker questions Auto1's ambition to return back to
growth, anticipating "meaningful acceleration" closer to 2023
end/2024 start, heralding Q3 to be "more of the same as Q2,"
which is not "enough for a momentum stock"
** HSBC believes that compared to peers, the company has
good posture on the market with sound long-term strategy, yet it
suggests "taking a breather," assessing the current risk-reward
balance as "unattractive"
** Shares in Auto1 are down 1.9%
** Out of 13 analysts that cover Telefonica Deutschland,
seven rate the stock "strong buy"/"buy," five rate it "hold"
and one analyst rate the stock "strong sell"/"sell" - Refinitiv
data
(Reporting by Amir Orusov)
((Amir.orusov@thomsonreuters.com))