Car Group: Successful Brazil Expansion Compensates for Sluggish North American Growth

We maintain our AUD 30 per share fair value estimate for narrow-moat Car Group following first-half results. Revenue from the company’s second-largest segment, North American nonautomotive marketplace Trader Interactive, is tracking below prior guidance and market expectations, which caused shares to sell off sharply. However, the company’s Latin American automotive marketplace, Webmotors, was stronger than our expectations. On balance, we see no reason to change our fair value estimate. At current prices, Car Group shares continue to screen as overvalued.