Analyst Note| Gareth James, CFA |
We have increased our fair value estimate for narrow-moat rated Carsales.com by 5% to AUD 22 per share following its first-half financial result. Although the result was strong, it was largely in line with our expectations. Our earnings forecasts are largely unchanged, and our fair value increase is due to the time value of money boost to our financial model. Carsales.com’s share price has fallen by 17% over the past two months, and, at the current market price of AUD 21.71, we now consider the shares to be fairly valued.