Why fund managers are split on Eagers Automotive after its Canada expansion

Eagers Automotive's exclusive BYD distributorship and a transformational Canadian acquisition have driven a sharp re-rating, though some managers now see limited valuation appeal.

15 Jul 2026 · 6 min read

Automotive retail group Eagers Automotive made a transformational move into North America in October 2025, agreeing to acquire a controlling 65% stake in CanadaOne Auto Group, funded partly through a $502 million equity raise that brought in Mitsubishi Corporation as a new strategic shareholder. Wilson Asset Management's October 2025 Monthly Report described Canada's fragmented dealership market, where leading players each hold only around 2% share, as fertile ground for expansion given Eagers' proven integration playbook.

From stodgy value stock to BYD-driven re-rating

Monash Investors' July 2025 Monthly Report captured how quickly sentiment had shifted: a year earlier Eagers was considered a stodgy, low-growth value stock, but its BYD distributorship for Australia had since excited the market even though the fund's own assessment of the company's long-term growth profile had not materially changed, prompting an exit near $21 a share on valuation grounds after buying in at just over $10. SG Hiscock & Company's August 2025 report detailed the operational drivers behind the subsequent 40% monthly rally: productivity measures, OEM aggregation on mega sites and the high-turnover EasyAuto123 used car model disrupting an industry sales structure that had been stagnant for decades, delivering industry-leading profit margins and the pulling power to attract challenger brands like BYD almost exclusively to its network.

Canada's new vehicle market is roughly 50 per cent larger than Australia's and offers structurally higher margins. Backed by strong OEM partnerships and the support of key stakeholders, including Mitsubishi, Nick Politis, and Pat Priestner, Eagers is well-positioned to consolidate both markets and drive accelerated earnings growth.

— Wilson Asset Management, Article, October 2025

Yarra Capital Management's September 2025 Quarterly Report detailed the operational inflection underpinning the re-rating: the company achieved its full-year turnover guidance in just six months, exceeding consensus expectations, in an environment where industry margins appeared to have bottomed in the first half of 2025. The October 2025 Canadian deal added a further leg to the growth story, with Mitsubishi Corporation also taking a 20% stake in Eagers' EasyAuto123 pre-owned car business for $70 million, alongside a separate $50 million Mitsubishi placement into Eagers itself.

What managers are watching next

Not every manager has stayed positive through the re-rating. Paradice Investment Management's September 2025 Quarterly Report noted the stock detracted from relative performance precisely because it outperformed, with the manager seeing limited valuation appeal following the re-rating and preferring exposure elsewhere in consumer discretionary despite acknowledging the company remains well managed. With Wilson Asset Management framing the Canadian expansion as strategically significant given a new vehicle market roughly 50% larger than Australia's and structurally higher margins, the pace of CanadaOne integration alongside continued EasyAuto123 growth in Australia and New Zealand are the key threads managers are tracking.