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  • Writer's pictureMark Watson-Mitchell

Vertu Motors is too cheap, says Liberum

Vertu Motors (VTU) is too cheap considering it is well positioned to consolidate the car dealership market, according to Liberum.


Analyst Sanjay Vidyarthi retained his ‘buy’ recommendation and target price of 100p on the stock, which jumped 6.4% to 46p on Wednesday.


The group delivered a strong first half, with profit before tax 14% ahead of expectations.


‘Current trade continues to show similar trends, with supply constraints supporting margins,’ said Vidyarthi.


‘We think that the trading environment will remain robust, with cost pressures the big variable.’


He increased full-year 2023 adjusted-profit-before-tax estimates by 9% to reflect the first-half beat and a good start to the second half, but he left profit forecasts in outer years unchanged.


‘A current-year 2023 price-to-earnings of just 5.2x is too cheap for a business that is so well positioned to consolidate the market,’ he said.


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