Auto Trader Shares Jump After Goldman Sachs Upgrade

Auto Trader Group (LON: AUTO) shares jumped Thursday after the stock was upgraded to Buy from Neutral at Goldman Sachs.

Analyst Lisa Yang lifted the firm’s rating on Auto Trader to Buy from Neutral, raising the price target to 749p from 644p per share. The re-rating was part of a more comprehensive research note on European Internet and Media names.

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Yang explained that the company is expected to benefit from various factors such as the resilience of the largely subscription-based core business model, strong product-driven ARPD growth and a recovery in stock, and the possibility to tap into transactions through the roll-out of Deal Builder.

Auto Trader shares are currently up 1.55% at 575.6p per share. However, earlier in the session, the stock hit a high of 586.2p.

In December, Auto Trader’s price target was raised to 550p from 528p at JPMorgan, although the firm maintained an Underweight rating on the shares.

Meanwhile, in late November, RBC Capital lowered its price target on Auto Trader to 610p from 640p, keeping a Sector Perform rating on the stock, telling investors that while they have confidence in Auto Trader’s growth opportunity long-term, the macro challenges could cause a slower pace of product and high-yield package adoption near-term.

According to Tipranks, out of ten analysts, two have a Buy rating, six have a Hold rating, and two have a Sell rating on Auto Trader shares. The average price target is 614.44p, representing a more than 6% potential upside.