Eagers Automotive (ASX:APE) underperformed the ASX 300 index by 25% since Sept. 30, 2025, and is currently one of the few "appealing" ASX discretionary stocks, Jefferies said in a May 25 note, recommending that investors buy the dip.
The investment firm views Eagers Automotive's recently completed acquisition of CanadaOne positively, saying that CanadaOne is outperforming the Canadian market.
Additionally, with its easyauto123 used car retail brand, Eagers Automotive is expected to outperform system used vehicle volumes, Jefferies said.
The company's upcoming annual general meeting on Wednesday will probably include some positives and negatives, but the positives should outweigh the negatives overall, Jefferies said. It added that Eagers Automotive will probably not provide any explicit guidance for fiscal 2026.
The equity research firm expects Eagers Automotive to be "easily outperforming" the flat Australian market in the calendar 2026 year to date, with its acquisition of Grand Motors and Zagame taking its domestic share to 15% from June.
Jefferies maintained a buy rating on the company with a price target of AU$30.50.
Eagers Automotive's shares were up over 1% in recent Tuesday trade.