This report is an updated version of the report published on 28 January 2025 at 2:50 PM AEDT.

Amotiv Limited (ASX: AOV)

AOV, formerly G.U.D. Holdings Limited, owns a portfolio of companies specializing in providing automotive products and solutions that meet the evolving needs of its customers worldwide. 

Recommendation Rationale - SELL at AUD 10.83

• Facing Resistance: The stock is approaching its Resistance 1 level. However, its 14-day Relative Strength Index (RSI) is showing a reading of ~62.92, which indicates the stock is approaching overbought zone.
• Overvalued Multiples: On a forward 12-month basis – key trading multiples (EV/Sales, EV/EBITDA and Price/Cash Flow) are higher than the median of the Automobiles & Auto Parts Industry.
• Risks to Revenue Growth: Although the company looks optimistic about its FY25 outlook, continued weakness in the NZ market and ongoing softness in the Caravan/RV market and broader economic conditions may act as headwinds.
• Cash Conversion Ratio Expected to Fall Further: In FY24, AOV’s cash conversion ratio fell to 92.9% from 112.40% in FY23. The company expects cash conversion to fall further to ~85% in FY25.

AOV Daily Chart

Valuation Methodology: Price/Earnings Approach (FY Jun'25E) (Illustrative)

AOV is expected to trade at a slight premium compared to its peers considering the organic revenue growth and EBITA growth in FY24, positive outlook on wear and repair market, and forward-booking data for FY25. For conducting valuation, the following peers have been considered: ARB Corporation Ltd (ASX: ARB), Eagers Automotive Ltd (ASX: APE), Autosports Group Ltd (ASX: ASG), and others.

Considering that the stock is approaching overbought zone, market uncertainties, and risks associated, the share price can witness some correction at the current levels before moving higher. Hence, a ‘Sell’ recommendation is given on the stock at the current market price of AUD 10.83, as of 28 January 2025 at 2:31 PM, AEDT.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 28 January 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Dividend Yield may vary as per the stock price movement.

Note 5: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.