Bapcor/BAP

Scarcely 10 days later, the downgrade comes, for Bapcor.

Back in October, we wrote where the variance to the prevailing narrative (that BAP was recession-resistant) was (at least, where we thought it was), that you could always skip a service or two.

Also in October, we wrote about the main issue looking forward, which was that earnings forecasts were simply too high for a stock in downgrade mode.

Expect BAP to trade weakly today.

[UPDATE]: it traded up. On a large miss. The AFR reporting M&A interest, which the Australian’s Dataroom have been talking up for much of recent past. Perhaps it will come, but the headline PE isn’t beaten up enough (at least for us!) to think about paying a 20% premium for control.

Also interesting, despite the update specifically referencing bullbars/rr as per the below, ARB also strong.

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