AutoCanada Inc. (ACQ:CA) ATB Capital Lowers Target on Weaker Sales

AutoCanada Inc. (ACQ:CA)

AutoCanada Inc. (ACQ:CA) — ATB Capital Markets lowered its 12 month target to C$30 from C$32 and maintained a Sector Perform rating, citing continued softness in new and used vehicle sales volumes and margin pressures across several business segments. The brokerage noted that while consumer demand has remained resilient in certain regions, higher interest rates and affordability challenges have begun to weigh on overall dealership performance.

ATB highlighted that inventory normalization and a more competitive pricing environment are compressing gross margins, particularly in the used vehicle segment, where pricing has declined from pandemic highs. In addition, rising operating costs and shifts in financing availability are adding pressure to near-term profitability.

However, the firm acknowledged that AutoCanada’s diversified dealership network, exposure to both domestic and import brands, and ongoing cost discipline initiatives should help stabilize results over the medium term. Analysts view the current environment as transitional, with potential for recovery in 2025 as macroeconomic conditions improve and consumer confidence rebounds.

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