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On Friday, Berenberg initiated coverage on AUTO1 Group SE (AG1:GR) (OTC: ATOGF), a leading digital platform for buying and selling used cars in Europe, assigning the stock a Hold rating and a price target of €19.00. The firm recognized AUTO1 Group's significant operational advancements and projected that the company would achieve an adjusted EBITDA break-even for the first time in its history in FY 2024.
The company's progress is underscored by its ability to adapt and grow within the competitive used car market in Europe. Despite this positive outlook, Berenberg anticipates a challenging environment for the used car market in 2025. This is expected to result in a deceleration of revenue growth for AUTO1 Group, as the company may shift its focus towards enhancing margins.
Berenberg's analysis suggests that AUTO1 Group's market position and operational achievements are counterbalanced by the potential headwinds in the upcoming year. The firm's Hold rating reflects a cautious optimism about the company's ability to navigate a potentially tougher market landscape.
In his statement, the Berenberg analyst Wolfgang Specht noted, "AUTO1 Group SE operates a market-leading digital platform for buying and selling used cars in Europe. The company has made significant operational progress over the years and should break even on an adjusted EBITDA basis for the first time in its history in FY 2024."
Specht further elaborated on the forecast for AUTO1 Group, indicating that "Expecting a tougher environment for the used car market in key geographies in 2025, however, we anticipate that revenue growth will slow, and that the company will prioritize margin growth." This assessment led to the initiation of coverage with a Hold recommendation, as Berenberg weighs the current achievements against the anticipated market conditions.
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