LONDON (ShareCast) - (Sharecast News) - Analysts at Liberum raised their target price for shares of 'top pick' Auto Trader on the back of its latest interims, saying the group's performance was proof that its shift towards a strategy based on average revenues per retailer was paying dividends.
The faster and higher quality growth should drive a re-rating in the shares, they argued.

Their comments followed a more than 14% surge in shares of the digital automotive marketplace during the previous session, after the company revealed record profits and upgraded its guidance.

For its 2022 financial year, Auto Trader was now anticipating growth at retailer forecourts and low double-digit ARPR growth.

That compared to the company's previous forecasts for no growth and high single-digit growth, respectively.

As a result, the analysts raised their revenue estimates for 2022-24 by 5%, 6%, and 7%, respectively.

In turn, their target price for the shares was lifted from 815.0p to 860.0p, implying a calendar year 2022 price-to-earnings multiple target of 30.

Liberum also reiterated the shares as their 'top pick' amongst online platforms.

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