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On Monday, BMO Capital Markets maintained a Market Perform rating on AutoCanada (ACQ:CN) (OTC:AOCIF) shares, with a steady price target of Cdn$20.00. The firm’s analysis highlighted AutoCanada’s impressive operational expenditure results for the first quarter of 2025, which surpassed BMO’s expectations and contributed to a significant EBITDA beat. The company’s effective cost-saving measures were noted as a key factor in this performance.
AutoCanada reportedly realized greater cost reductions than anticipated in the first quarter of the year. The company has confirmed its goal to secure annualized savings of Cdn$100 million by the fourth quarter of 2025. Although there was a slight softening in vehicle demand during Q1/25, the results were considerably more favorable than expected. This was partially due to similar pre-tariff purchasing activity that was observed in the United States.
As of May, AutoCanada has observed a deceleration in demand; however, the extent of this slowdown was not detailed. Despite the current trends, AutoCanada’s stock is trading at 6.5 times BMO’s revised 2026 EBITDA estimates, which falls within the historical range of 6 to 8 times.
BMO’s commentary suggests that AutoCanada’s cost-saving strategies and better-than-anticipated performance in the face of softening vehicle demand have been crucial to its financial results. The company’s reiteration of its cost-saving target indicates a continued focus on operational efficiency moving forward. The stock’s current valuation, as noted by BMO, reflects its position within the historical trading multiples, suggesting a market perception that aligns with past performance trends.
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