Bapcor Ltd

BAP: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$1.40	Pghlj	Nhzsmlgzj

Bapcor: Pessimism Overblown Amid Temporary Slowdown

Angus Hewitt

Dec 20, 2023

Shares in narrow-moat Bapcor screen materially undervalued amid both short-term headwinds and structural changes facing the automotive industry. A slowdown in discretionary spending weighs on retail near term, new management still needs to prove itself, and the proliferation of electric vehicles, or EVs, is a long-term obstacle for the trade business. However, we think near-term pessimism overlooks fundamental resilience in automotive spare parts, and Bapcor is likely to successfully adapt to the gradual technological transition. Our AUD 8 fair value estimate stands.

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