<WIRE> Eagers Automotive (ASX:APE) Reaches Five-Week Peak

Eagers Automotive (ASX:APE)’s shares escalated to a five-week high, recording an increase of up to 4.1% reaching A$14.910.

If the upward surge continues to hold, it will realize the highest profits since August 30.

The firm’s stock has also reached its zenith level since September 7.

Analysts view Eagers Automotive’s purchase of a dealerships network throughout Melbourne and Victoria as a positive business move.

Earnings potentials that may decline in the upcoming 12-18 months would be compensated by this acquisition, Citi estimates.

Morgan Stanley asserts this acquisition would enhance turnover by approximately A$1.0 bln and could result in a 3%-4% increase in earnings.

But the target pricing has been lowered to A$14.60 down from A$14.70 because of expected high debt originating from the acquisition.

Following the acquisition, Morningstar adjusted their fair value estimate, increasing it by 6% to A$12.50.

As of the latest close, Eagers Automotive’s stock had already seen a 32% surge this year.

Eagers Automotive is an Australian-based company engaged in automotive retail and logistics.

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