GUD: Well-Positioned as an Automotive Pure-Play

With the divestment of Davey, a largely unrelated water pumps business, GUD is now an automotive pure play—and likely to change its name to Amotiv to reflect this. With this comes a new divisional structure, announced on its investor day. Previously split between the core automotive businesses and the acquired APG business, GUD will report fiscal 2024 results for three segments: 4WD accessories and trailering—about 30% of earnings; lighting, power, and electrical —about 33% of earnings; and powertrain and undercar—about 37% of earnings. The firm also provided fiscal 2024 underlying EBITA guidance, not including Davey, of at least AUD 194 million. We make no change to our AUD 195 million forecast. Shares in GUD screen as slightly undervalued compared with our unchanged AUD 12 fair value estimate.