This report is the updated version of the report uploaded on 11 October 2023 at 4:40 PM GMT +11

Bapcor Limited

BAP Details

Bapcor Limited (ASX: BAP) is an Australia-based provider of vehicle parts, accessories, equipment, service as well as solutions.

Financial Results for FY 2023

• BAP witnessed record revenue of $2.0 Bn, reflecting a rise of ~9.7%, with growth throughout all the segments. It posted pro-forma NPAT of $125.3 Mn, with H2 FY 2023 pro-forma NPAT of $63.3 Mn higher than H1 FY 2023 of $62.0 Mn as well as in line with guidance.
• There was an ongoing focus towards capital efficiency with ~$50 Mn like for like reduction in inventory resulting in significantly improved cash conversion of 145.4% in H2 FY 2023.
• In line with BAP’s dividend policy as well as on the back of the robust operational performance, a fully franked final dividend of 11.5 cps was declared.

Outlook

BAP’s priority is to continue to perform operationally, as well as executing its Better than Before transformation program. For FY 2024, the company anticipates the robust underlying performance subject to the market conditions as well as for the Better than Before program to deliver the targeted FY 2024 goals.

Key Risks

The fluctuations in the prices of raw materials as well as other variable factors such as labour could impact the financial performance of the company.

Fundamental Valuation

P/E Based Relative Valuation

Stock Recommendation

Over the last 3 months, the stock has given a return of 8.758%. The stock has made a 52-week low and high of AUD 5.81 and AUD 7.09, respectively. The company’s performance is exposed to the risks related to the global slowdown as well as geopolitical tensions. Therefore, investors should exit the stock.

Hence, a ‘Sell’ rating has been provided on the stock at the current price of AUD 6.775 per share (Australian Time: 4:00 PM (GMT +11)) as on 11^th October 2023.

Technical Overview:

Daily Price Chart

Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Disclaimer

References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.

This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332. Kalkine Limited is authorised and regulated by the Financial Conduct Authority under reference number 579414.

The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation.

Kalkine does not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. Kalkine’s non-personalised advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested.

Kalkine Media Limited, an affiliate of Kalkine Limited, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.