Morningstar | Bapcor's Earnings Are Supported by the Steadily Growing Vehicle Fleet
We expect a combination of store rollouts, like-for-like sales growth of 3%-4% per year, growing private label penetration and modest operating leverage to drive 12% EPS growth, on average during the five years ending fiscal 2023. The presence of a dual-market approach through a retail store network and trade network lifts Bapcor’s market share, although industry competition remains intense due to heavy fragmentation. The consolidation of the Australian aftermarket autoparts sector is expected to deliver higher returns for Bapcor over the next five years. We are attracted to the defensive nature of the trade segment, which generates around half of group earnings. Demand is resilient, driven by the total supply of vehicles, which we expect to continue growing at around 2% per year, outpacing population growth.Bapcor is engaged in the sale and distribution of motor vehicle aftermarket parts and accessories, automotive equipment and services, and motor vehicle servicing. Co. has three operating segments. The Trade segment is a distributor of automotive aftermarket parts and consumables to trade workshops for the service and repair of vehicles, automotive workshop equipment such as vehicle hoists and scanning equipment, and automotive accessories and maintenance products to do-it-yourself vehicle owners. The Retail segment consists of business units that are retail customer focused. The Specialist Wholesale segment consists of the operations that focus on automotive aftermarket wholesale.
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