TRA - Turners Automotive Group

[Basil]

Makes a somewhat interesting comparison. CMO trading at 14.4 times last years earnings and has a 7 year EPS CAGR of negative 4.27% !
Has had extreme volatility in earnings over the years too.  New vehicle franchises are far more vulnerable to huge shifts in demand than Turners are which is another reason why Turners has seen market recognition for its achievements. 

Consider this. How many other companies on the NZX can boast of 5 years in a row, soon to be 6 of record profits with all the endless drama's and the almost endless recession since Covid hit in early 2020 ?  No wonder the market has woken up to TRA's attributes.  Their Tina campaign has also been a huge hit but I am still not so sure about whether the new Tina campaign is nearly as good as the first bunch of advertisements which in my opinion had brilliant creative talent.

I'd like to see Todd mix and match up the first and second series of adds a bit.  Might reach out to him and suggest that when I have the time and maybe mention the benefits of a share split again.

[winner (n)]

CMO PBT is 3% of sales compared to TRA at 13% ....amazing

Turners sell less than half of CMO does but makes more twice as much

[Dolcile]

The other thing about Turners is that their revenue is diverse which reduces risk. 

I think CMO trades at a comparatively higher multiple because of the low float and significant Gibbons family holding. 

[Left Field]

Todd from Turners interviewed on RNZ Morning Report this morn...... good stuff.

"16% of shares owned by staff."

"plenty of runway's to grow, we are at only 10% market share."

[winner (n)]

Todd from Turners interviewed on RNZ Morning Report this morn...... good stuff.

"16% of shares owned by staff."

"plenty of runway's to grow, we are at only 10% market share."

Link to interview

https://www.rnz.co.nz/national/programmes/morningreport/audio/2019020865/ceo-interview-todd-hunter-turners-automotive-group

[Dolcile]

All I'm hearing is we are still in growth mode and there is a long runway ahead.

[mike2023]

New car sales up. Presumably with rentals being restocked as tourists return in greater numbers.

[Ferg]

What is the historical uptake of the dividend reinvestment plan?  Back of the fag packet calculation suggests around 15% uptake this time....that seems low to me.

[Dolcile]

AI tells me that the percentage of DRP update started at about 25% in 2023 and has gradually declined the 15% we have just seen.

[Playa]

What will the share price be in 12 months time in your opinion?

[Greekwatchdog]

For Bar downgrade to underperform

We downgrade our rating on Turners Automotive (TRA) from NEUTRAL to UNDERPERFORM.

TRA has emerged from a prolonged New Zealand economic downturn with its operating model increasingly well understood by the market, alongside early signs of cyclical improvement.

Recent peer updates point to a recovering consumer backdrop, and our proprietary data suggest a modest improvement in TRA's second-hand transactional volumes through FY26 to date. Reflecting this, we lift our FY26 earnings estimates and increase our price target. However, TRA's share price has materially outperformed underlying earnings, producing a +68% total return over the past year and driving a sharp multiple re-rating.

While we believe a re-rating was justified and continue to view TRA as a high-quality business with disciplined execution, diversified earnings streams, and clear growth drivers, we consider that much of TRA's historical multiple mis-pricing has now been corrected. With the market pricing in a more robust recovery than is currently evident in our volume data, we see the balance of risk skewed towards a period of share price consolidation following its strong run.

Target $7.85

[Shareguy]

For Bar downgrade to underperform

We downgrade our rating on Turners Automotive (TRA) from NEUTRAL to UNDERPERFORM.

TRA has emerged from a prolonged New Zealand economic downturn with its operating model increasingly well understood by the market, alongside early signs of cyclical improvement.

Recent peer updates point to a recovering consumer backdrop, and our proprietary data suggest a modest improvement in TRA's second-hand transactional volumes through FY26 to date. Reflecting this, we lift our FY26 earnings estimates and increase our price target. However, TRA's share price has materially outperformed underlying earnings, producing a +68% total return over the past year and driving a sharp multiple re-rating.

While we believe a re-rating was justified and continue to view TRA as a high-quality business with disciplined execution, diversified earnings streams, and clear growth drivers, we consider that much of TRA's historical multiple mis-pricing has now been corrected. With the market pricing in a more robust recovery than is currently evident in our volume data, we see the balance of risk skewed towards a period of share price consolidation following its strong run.

Target $7.85

Thanks for posting. Typical, just when I had  finally become a holder.

[Greekwatchdog]

Thanks for posting. Typical, just when I had  finally become a holder.

Its subjective and argumentive. Its their view based on the info they gather, others will have theirs based on past performance.

Bottom draw until TRA results say otherwise tehn you decide..

[Dolcile]

And conveniently they increase their target price after the share has already surpassed it!

[Greekwatchdog]

And conveniently they increase their target price after the share has already surpassed it!

Go figure