Auto Trader Remain cautious on a challenging road ahead - back-end loaded recovery & ARPR durability in focus

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Auto Trader Remain cautious on a challenging road ahead - back-end loaded recovery & ARPR durability in focus

J.P. Morgan Securities plc

we argue this is yet to fully reflect the group’s structurally slower growth profile

(+5% CAGR27-29E vs peers +10%) and heightened execution risk ahead, while Specialist Sales contact details:

a back-end loaded recovery and regulatory overhang from the ongoing CMA are Scott Silver - Specialist Sales -

likely to keep risk premia elevated in our view. European TMT

(44-20) 7134-0412

• Taking stock of FY26 delivery & the roadmap for FY27 (detailed on Page scott.silver@jpmorgan.com

3). In our view, Auto Trader’s FY26 results presentation struck a cautious tone Key Changes (FYE Mar)

with management acknowledging low visibility and a challenging start to Prev Cur Δ

FY27, following a tougher-than-expected profitability backdrop for retailers Adj. EPS - 28E (p) 40.50 43.07 6.3%

and a weaker exit-rate driven by pushback and churn in November and

December. Guidance implies a recovery reliant on rebuilding retailer Style Exposure

engagement, paid stock and package penetration, while ARPR remains

constrained by a still-soft stock lever and limited contribution from

prominence. Deal Builder remains strategically important but is being rolled

out more carefully after product and onboarding adjustments, and the stepped-

up buyback underpins EPS optics; however, management’s commentary

reinforced that confidence hinges on stabilizing core KPIs and execution

through H1, with incremental uncertainty from the CMA review overhang.

• Underlying estimates broadly unchanged, earnings support on returns.

We leave our below-consensus revenue estimates unchanged across FY27-29

which continue to reflect a weaker retailer revenue road ahead (notably in H1,