6 Analysts Cut Valuation on AutoCanada’s Disappointing Earnings

AutoCanada Inc. (ACQ:CA)

On Wednesday August 14th, 6 analysts updated their research coverage on Autocanada’s stock, after the company released its quarterly earnings.

AutoCanada reported a challenging quarter, ending June 30, with a significant net loss of $33.1 million, compared to a net profit of $45.2 million during the same period last year. AutoCanada disclosed that it experienced a cybersecurity breach involving CDK Global, a major provider of digital marketing and software solutions for the automotive industry. This breach potentially compromised the company’s systems and operations. The impact of this breach has been severe enough to contribute to the financial loss reported for the quarter.

Analyst Ratings Update:

• CIBC World Markets has maintained an “Outperform” rating for AutoCanada Inc, indicating that the stock is expected to perform better than the average market or its peers. However, the target price has been reduced to CAD 15.5, which reflects a more cautious outlook compared to previous expectations. This downward adjustment suggests that while CIBC World Markets still believes the stock will outperform, their confidence in its short-term potential has decreased.
• STA Research has assigned a “Hold” rating to AutoCanada Inc. This recommendation implies that investors should continue holding their current positions in the stock rather than making new purchases or selling their shares. The target price set by STA Research has been lowered to CAD 20, indicating a reduction in their growth expectations for the stock.
• BMO Capital Markets has given AutoCanada Inc a “Market Perform” rating, which suggests that the stock is expected to perform in line with the broader market. The target price has been adjusted down to CAD 19.5, reflecting a more cautious view on the stock’s future performance, implying that BMO Capital Markets anticipates the stock will move in line with overall market trends rather than outperforming.
• RBC has issued a “Sector Perform” rating, which is similar to “Market Perform” and suggests that AutoCanada’s stock is likely to perform at a pace comparable to the sector average. RBC’s target price for the stock has been reduced to CAD 18, indicating a tempered outlook and aligning with their expectation that the stock will track the general performance of the sector.
• Cormark Securities has not specified a rating for AutoCanada Inc but has set a target price of CAD 21.75. This target price reflects a cautious reduction from previous estimates, suggesting a more conservative forecast.
• National Bank Financial has given a “Sector Perform” rating, indicating that AutoCanada’s stock is expected to perform in line with the sector. Their target price has been lowered to CAD 17, which aligns with a more cautious view on the stock’s performance relative to its sector peers.
• ATB Capital Markets has not provided a specific rating but has set a target price of CAD 20 for AutoCanada Inc. This target reflects a reduction from earlier forecasts, suggesting a moderated outlook .

Stock Forecast

AutoCanada Inc’s stock forecast from 10 analysts sets the average target price at CAD 21.77 for the next 12 months. The average rating from analysts is “Hold,” reflecting a neutral stance on the stock. However, Stock Target Advisor’s analysis is “Bullish,” based on 7 positive signals versus 3 negative ones.

As of the last closing, AutoCanada Inc’s stock price stands at CAD 18.09. Over recent periods, the stock has seen a modest increase of +0.44% over the past week, but declines of -4.79% over the past month and -28.72% over the past year.