MS starts AUTO1 with 'underweight' on high investment requirements

AUTO1 SE

03/01/2024 09:07

** Morgan Stanley initiates coverage of AUTO1  AG1G.DE  with
"underweight", saying the German online used-car seller's costs
to drive growth will likely exceed consensus estimates
    ** The broker says the company's selling, general, and
administrative requirements are still high, and volume growth
will likely come with higher marketing and personnel costs
    ** It expects investment requirements to keep AUTO1's EBIT
negative until 2027, while the market expects a positive EBIT
two years earlier
    ** "If EBIT is positive sooner, it will likely come with
slower growth" - MS
    ** The broker adds the shares price in higher top-line
growth and earlier profitability than MS anticipates 
    ** Out of 13 analysts that cover AUTO1, seven rate the stock
"strong buy" or "buy", ​five "hold" and one "sell" - LSEG

 (Reporting by Chiara Holzhaeuser)
 ((Chiara.Holzhaeuser@thomsonreuters.com))