Bapcor's (ASX:BAP) turnaround initiatives are gaining traction operationally, but weaker trading conditions are limiting near-term earnings flow-through, Jefferies said in a Monday note.
Bapcor lowered its fiscal 2026 guidance for underlying earnings before interest, taxes, depreciation and amortization (EBITDA) to between AU$144 million and AU$150 million from the previous guidance of AU$150 million to AU$160 million.
The downgrade to its underlying EBITDA guidance reflects a business mid-turnaround being impacted the fuel shock caused by the conflict in the Middle East in an already depressed market, with cost inflation and weaker demand driving a fiscal 2026 downgrade despite improving execution.
The investment firm upgraded its recommendation to buy from hold and lowered the price target to AU$0.65 from AU$1.05.