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On Monday, Jefferies has increased the price target for CAR Group (CAR:AU) (OTC: CSXXY) to AUD43.70, up from the previous target of AUD43.60, while reaffirming its Buy rating on the stock. The company, currently valued at $9.03 billion, has maintained impressive gross profit margins of 84.15% and achieved robust revenue growth of 40.64% over the last twelve months. The adjustment follows the company’s recent performance, which fell short of consensus expectations by 3%, primarily due to a temporary slowdown in its United States business, known as TI.
The firm’s analysts believe that the slowdown in the U.S. is only temporary and expect the outlook for TI to improve significantly starting from the financial year 2026. According to InvestingPro analysis, the stock appears to be trading above its Fair Value, though the company maintains a "GREAT" financial health score. They suggest that despite the current challenges, TI is capable of delivering double-digit growth when market conditions improve. This optimism is based on the company’s potential for further diversification.
Despite the underperformance in the U.S., CAR Group has demonstrated strong growth in other markets. The company continues to achieve robust expansion in Brazil and Korea. Additionally, the Australian market is still experiencing high single-digit growth, contributing positively to the overall performance of the group.
Jefferies’ stance on CAR Group remains positive, with the belief that the company’s diversified operations will enable it to overcome the temporary headwinds in the U.S. The firm’s analysts emphasize the potential for sustained growth across the company’s international markets, which appears to underpin their decision to maintain a Buy rating on the stock.
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