Fund Manager Summary
The fund managers believe that the outlook for Eagers Automotive Ltd presents a compelling opportunity, although caution is warranted. In their opinion, the recent 23% re-rate and contribution of 1% to the Fund indicate strong market performance. However, with the share price reaching approximately $18.46, they recommend trimming their position as the risk/reward set-up is less attractive compared to previous levels around $10 per share. They highlight Eagers' leading market share, significant scale benefits, and integrated business model as strengths, particularly its strong sales growth from BYD. Yet, they caution that at this level of maturity, growth may slow, and short-term returns will be influenced by market multiples, suggesting a potential rotation into better value investments.
Source: Trading View
Commentary From The Managers
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Centennial Asset Management
31 Oct 2025
$34.06
Summary
- Centennial Asset Management notes that portfolio holding Eagers Automotive (APE) performed well in October.
- The company has expanded its business internationally into the Canadian market through an investment in CanadaOne.
- APE has taken a majority position of 65% in CanadaOne for A$1.043B, with the founder retaining the remaining 35%.
- The transaction included an entitlement offer at $21 a share, raising $452M.
- This acquisition provides APE with access to a significantly larger market and potential for further growth.
- The CanadaOne acquisition significantly increases APE’s scale and global footprint.
- The deal is expected to be immediately earnings accretive.
- Following the deal announcement, the APE share price has performed well, currently trading at $31.83 a share.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Centennial Asset Management
31 Oct 2025
$34.06
- Centennial Asset Management notes that portfolio holding Eagers Automotive (APE) performed well in October.
- The company has expanded its business internationally into the Canadian market through an investment in CanadaOne.
- APE has taken a majority position of 65% in CanadaOne for A$1.043B, with the founder retaining the remaining 35%.
- The transaction included an entitlement offer at $21 a share, raising $452M.
- This acquisition provides APE with access to a significantly larger market and potential for further growth.
- The CanadaOne acquisition significantly increases APE’s scale and global footprint.
- The deal is expected to be immediately earnings accretive.
- Following the deal announcement, the APE share price has performed well, currently trading at $31.83 a share.
Summary
Perpetual Asset Management
31 Oct 2025
$34.06
- Eagers Automotive delivered a strong performance in October, rallying 23.6% for the month.
- The rally was driven by the announcement of a strategic acquisition of 65% equity in CanadaOne Auto.
- The acquisition was secured at an attractive entry price and represents an expansion into Canada’s dealership market, which is 50% larger than Australia’s.
- CanadaOne comprises 42 dealerships and generated $5.5 billion in revenue with $221 million in pre-tax profits last financial year.
- Eagers plans to raise $452 million through an equity offering, including a $50 million strategic placement to partially fund the $1,043 million transaction.
- In the release of 1H25 earnings, Eagers recorded an 18.9% jump in revenue and 8.3% more profit compared to the prior year.
- October vehicle sales increased by 0.7%, beating expectations, positioning the company to set a new record for the year.
- With its expanding market position in global automotive retail and a diversified earnings base, Eagers is well-positioned for anticipated margin expansion and operational leverage.
- Management continues to execute on strategic initiatives amidst normalizing market conditions.
Summary
Wilson Asset Management
31 Oct 2025
$34.06
- Eagers Automotive is the leading automotive retail group in Australia and New Zealand.
- In October, the company announced a transformational move into North America, acquiring a controlling stake in CanadaOne Auto Group.
- This acquisition is funded via an equity raise that included Mitsubishi Corporation.
- Mitsubishi Corporation also took a 20% stake in Eagers Automotive’s easyauto123 business for $70 million.
- An Investor Day later in the month outlined the strategic rationale and runway for growth.
- Canada’s fragmented market, where leading players have around 2% market share, presents a fertile landscape for expansion.
- Eagers Automotive’s proven integration playbook is a clear advantage in this market.
- Optionality in easyauto123 is underappreciated.
- Core operations in Australia and New Zealand continue to deliver strong results.
- Wilson Asset Management retains high conviction in the company’s management quality and multi-year growth path.
Summary
Wilson Asset Management
1 Oct 2025
Unknown
- Eagers Automotive's $1bn investment in Canada is deemed a strategically significant step by Wilson Asset Management.
- The acquisition will provide Eagers with a 65% stake in CanadaOne, with founder Pat Priestner retaining 35%.
- Canada's new vehicle market is approximately 50% larger than Australia's and offers structurally higher margins.
- Wilson Asset Management's senior equity analyst, Sam Koch, emphasizes Eagers' strong OEM partnerships and key stakeholder support.
- Investment backed by Mitsubishi Corporation, which is also acquiring a 20% stake in Eagers' easyauto123 pre-owned car business.
- The funding for the CanadaOne deal includes $502m equity raising and $386m in exchangeable shares issued to Mr. Priestner.
- Mr. Priestner will maintain a 7.1% stake in Eagers post-deal and has an option to acquire a 5% stake in easyauto123.
- Shares in Eagers were trading at $29.32 before the trading halt.
Summary
Yarra Capital Management
30 Sept 2025
$28.68
- Eagers Automotive (APE, overweight) has shown strong performance following its 1H25 result.
- The company experienced strong momentum in both new and used car deliveries.
- It has gained market share and achieved its full-year turnover guidance in just six months.
- Results exceeded consensus expectations.
- Positive lead indicators suggest the automotive sector is at an inflection point.
- Industry margins are bottoming in 1H25.
- APE operates a diversified portfolio of brands expected to continue outperforming.
- Key value drivers include the scale and quality of the network, breadth of OEM brand partnerships, and unique assets like the BYD JV and EasyAuto.
Summary
Paradice Investment Management
30 Sept 2025
$28.68
- Eagers Automotive detracted from relative performance as the stock outperformed the market during the quarter.
- Performance was supported by a resilient interim result and continued strength in used-vehicle pricing.
- The company reported record first-half earnings and maintains a healthy order book.
- Despite this, there is a normalisation in new vehicle deliveries.
- While the company is well managed, Paradice Investment Management sees limited valuation appeal following the recent re-rating.
- Paradice Investment Management prefers exposure elsewhere in the consumer discretionary sector.
Summary
Perpetual Asset Management
31 Aug 2025
$27.55
- Eagers Automotive delivered a solid performance in August (+40.9%).
- Stock advanced following the release of encouraging half-year results that surpassed market expectations.
- The company demonstrated operational resilience with underlying profit exceeding forecasts.
- Profit driven by stronger-than-anticipated revenue growth, though margin pressures persisted.
- Significant improvement in operating cash flow generation enabled meaningful debt reduction.
- Management guidance indicates first half represents trough margins, with expectations for progressive improvement.
- Expectations supported by enhanced productivity initiatives and industry recovery.
- Eagers has a commanding market position in Australian automotive retail.
- Company is well-positioned to benefit from anticipated margin expansion and operational leverage.
- Continued execution of strategic initiatives as market conditions normalize.
Summary
Yarra Capital Management
31 Aug 2025
$27.55
- Eagers Automotive (APE, overweight) has shown strong performance following its 1H25 results.
- The company experienced strong momentum in both new and used car deliveries.
- It has successfully gained market share and achieved full year turnover guidance within six months.
- Results exceeded consensus expectations.
- Lead indicators suggest a positive outlook as the automotive sector may have reached an inflection point.
- Industry margins are reportedly bottoming out in 1H25.
- APE's diversified portfolio of brands is expected to continue outperforming.
- Key value drivers include the scale and quality of the network, breadth of OEM brand partnerships, and unique assets like the BYD JV/EasyAuto.
Summary
SG Hiscock & Company
31 Aug 2025
$28.16
- SG Hiscock & Company continues to hold a positive outlook on Eagers Automotive Ltd (APE) following a strong performance in August, with a 40% rally for the month.
- APE is recognized as Australia’s leading automotive car dealer franchise, boasting the largest auto dealer network in the country.
- The company employs a unique, disruptive business model that differentiates it from traditional industry practices.
- Key strategies include productivity measures, OEM aggregation on mega sites, and a high turnover used car model branded as Easy Auto 123.
- These innovations are disrupting stagnant industry sales models and leading to industry-leading profit margins.
- APE's ability to attract key OEMs, including BYD, a challenger EV brand in Australia, underscores the pulling power of their franchise.
Summary
Monash Investors
31 July 2025
$19.62
- Monash Investors invested in Eagers Automotive just over a year ago at over $10 per share.
- Eagers is a high quality but low-growth integrated automotive group.
- The company is the largest operator in Australia, with operations in new and used car sales, service, finance, and insurance.
- A year ago, Eagers was viewed as a stodgy value stock with low growth and an uninspiring outlook.
- Despite recent excitement from its BYD distributorship, the long-term growth and earnings profile remains unchanged.
- At around $21 per share, Eagers is now considered fully valued by the market.
- Monash Investors prefers to rotate out of this position to pursue more prospective opportunities.
- Eagers demonstrates a stable and consistent business model, although profitability can fluctuate.
- The one-year price chart shows shares doubling, indicating significant recent performance.
- Over the past decade, investor sentiment has fluctuated wildly, with significant losses at various points.
- Monash Investors remains patient and disciplined, confident they will have the opportunity to invest in Eagers again in the future.
Summary
Yarra Capital Management
30 Apr 2025
$18.46
- Eagers Automotive (APE, overweight) performed well during the period with limited company-specific news.
- Yarra Capital Management anticipates continued strong growth in the BYD Retail joint venture.
- Growth is expected to be driven by new models like the BYD Shark and expansion of the retail network.
- Long-term expectations include improving PBT margins, reflecting the quality of APE’s dealer properties.
- Other growth factors include a rise in ancillary services and strong service revenue.
- Yarra Capital Management believes productivity initiatives will contribute positively to margins.
- Despite challenges in the new vehicle supply and excess inventory, APE's diversified portfolio of brands is expected to outperform.
- Overall market improvement is anticipated to benefit APE’s operations.
Summary
Monash Investors
30 Apr 2025
$18.46
- Eagers Automotive Ltd experienced a strong re-rate, increasing 23% and contributing 1% to the Fund.
- The position has reached a full 5%, prompting trim at higher levels.
- Monash Investors finds the risk/reward setup less attractive compared to levels around $10 per share.
- Eagers is characterized as a high-quality business with a leading market share and significant scale benefits.
- The company benefits from strong sales growth of BYD vehicles distributed in Australia.
- However, as the company matures, growth rates are expected to decrease.
- Short-term returns will largely depend on movements in market multiples.
- With higher multiples, expectations need to be moderated, making it a candidate for rotation into better value elsewhere.
Summary
Monash Investors
28 Feb 2025
$14.99
- Monash Investors continues to hold due to Eagers Automotive's positive performance despite sector expectations being low.
- The market reacted positively to Eagers' recent results, evident from a 16% share price increase.
- Eagers has delivered a 50% return since initial investment in July.
- The company is viewed as an underrated leader with a strong economic model.
- Monash Investors appreciates stable, strong economics in what might be considered a "boring industry."
- Value compelling investments are still prioritized, even in less exciting sectors.
Summary
Monash Investors
31 Jan 2025
$12.91
- Monash Investors continues to hold a positive view on Eagers Automotive Ltd.
- Eagers Automotive rose by 9%, contributing 40bps to the portfolio.
- It is recognized as the largest auto dealer in Australasia, benefiting significantly from scale.
- The company operates across multiple auto verticals, including new and used car sales, parts, service, finance, and insurance.
- Eagers' business model is enhanced by a substantial portfolio of strategic real estate.
- Catapult Group also performed well, increasing by 9% and adding 40bps.
- Monash Investors has allowed Catapult Group to grow within the portfolio, increasing from a 1.5% position size to over 4%.
- This strategy exemplifies the benefits of taking a broad investment approach, letting successful investments gain importance.
- Monash maintains prudent position sizing limitations and risk controls.
Summary
Monash Investors
30 Sept 2024
$10.92
- Relatively new holding for the Fund
- Eagers is a leading auto dealer with operations across new and used car sales, parts, service, finance and insurance
- Benefits from a robust integrated business model
- Strong balance sheet underpinned by prime real estate beneath many dealerships
- Largest auto operator in Australia with over 10% market share, significantly larger than the next group
- In a highly fragmented market, Eagers has many years of growth ahead
- Recent half-year results were viewed positively, with shares previously sold off on negative sentiment
- Revenue continues to grow, although profitability contracted modestly
- Dividend has been maintained, indicating the quality of its business model
- Market appears to underestimate its potential for long-term growth and the high-quality nature of its economic model
- Initiated holding in July at around 10 times normalised earnings appraisal
- Expect strong performance for investors in the coming years
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"As Eagers Automotive Ltd surges to new heights, the allure of its growth story may dim; with lofty multiples, it appears prudent to reassess risk versus reward. Investors might find greener pastures as expectations shift in this evolving landscape."
Last Updated: 31 Oct 2025
Query The Data
Frequently Asked Questions
Who is investing in Eagers Automotive Ltd (ASX:APE)?
Fund managers including Monash Investors, Yarra Capital Management, SG Hiscock & Company, Perpetual Asset Management, Paradice Investment Management and Wilson Asset Management have invested in Eagers Automotive Ltd (ASX:APE).
Why do fund managers invest in Eagers Automotive Ltd?
Fund managers are investing in Eagers Automotive Ltd due to its strong market position, significant scale benefits, and integrated business model. The company has shown impressive sales growth, particularly from its distribution of BYD vehicles in Australia. However, as the share price has risen significantly, fund managers are reassessing the risk/reward dynamics, suggesting that while Eagers is a high-quality business, future growth may be more modest, prompting considerations for reallocating investments to better value opportunities.
What happened to Eagers Automotive Ltd (ASX:APE)?
Fund managers are investing in Eagers Automotive Ltd due to its strong market position as Australia’s largest automotive dealer, demonstrating operational resilience and consistent revenue growth. Recent strategic initiatives, including a significant acquisition in Canada, highlight its potential for expansion into a larger, more profitable market. The company’s unique business model, including high turnover used car sales through EasyAuto, and strong OEM partnerships, contribute to industry-leading profit margins. Despite recent stock price increases, analysts believe Eagers remains well-positioned for future growth, supported by a diversified earnings base and ongoing productivity improvements.