Auto Trader Group PLC: Risk Reward Update

Research evidence excerpt

Auto Trader Group PLC: Risk Reward Update

UpdateM

RiskRisk RewardReward– Auto Trader- AutoGroupTraderPLC (AUTOA.L)Group PLC (AUTOA.L)

AI Readiness Supports a More Positive View

PRICE TARGET 575p EQUAL-WEIGHT THESIS

We use a DCF valuation (c. 10.7% WACC, 3.0% long-term growth rate) to reach our price ▪Auto Trader’s strong competitive position

target. and pricing power remain intact, and we

now view expectations for new product 648p

monetisation as more grounded.

Consensus Price Target Distribution 470.00p 830.00p see the market as increasingly MS PT ▪We

recognising the defensiveness of the model,Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates

supported by deep dealer integration and a

clear product development pathway.

RISK REWARD CHART

Consensus Rating Distribution

GBp 25% Overweight

63% Equal-weight

780p780p(+72.34%)780p(+72.34%)(+72.34%)

13% Underweight

800 MS Rating

Source: Refinitiv, Morgan Stanley Research

575p575p(+27.04%)575p(+27.04%)(+27.04%)

Risk Reward Themes

453p453p453p

400 Disruption: Positive

400p400p(-11.62%)400p(-11.62%)(-11.62%) Pricing Power: Positive

View descriptions of Risk Rewards Themes here

MAY '25 NOV '25 MAY '26 MAY '27

Key: Historical Stock Performance Current Stock Price Price Target

BULL CASE 780p BASE CASE 575p BEAR CASE 400p

Dealers actively take on new products Resilient growth with new product Lack of growth Catalysts

innovation

The ramp-up of new services advances faster The shift to bundling Deal Builder into

than anticipated, with positive contribution Valuation based on DCF (3.0% terminal subscription packages limits the company's

to group EBITDA margin. Autorama growth rate, c.10.7% WACC). ability to generate incremental monetisation

becomes breakeven faster than expected. as a standalone product.