Auto Trader a Sell as Near-Term Headwinds Persist: Analyst

On Wednesday, Goldman Sachs resumed coverage of Auto Trader Group (LON: AUTO) with a Sell rating, citing near-term market headwinds and slower-than-expected progress in driving new growth opportunities. 

The investment bank set a price target of 777p a share for the stock.

According to Goldman Sachs, while Auto Trader retains its undisputed number one market position and strong pricing power, its growth will become increasingly dependent on the broader market outlook and the company’s ability to develop new revenue streams. 

However, they highlight that challenges in the auto market and product-related hurdles could weigh on the stock.

Goldman Sachs warned that these market headwinds could slow the company’s growth, impacting Auto Trader’s ability to expand its product offerings and unlock new opportunities.

The latest coverage from Goldman Sachs follows a recent price target cut from Barclays, which on Wednesday lowered its target on Auto Trader from 1,000p to 995p while maintaining an Overweight rating.

While Auto Trader shares performed well in 2024, this year has been a different story so far, with the stock down around 6.5%. In the last six months, it has dropped over 15% and currently sits around the 740p a share mark.