We see today’s AGM update as very reassuring, showing there can be net winners in the automotive sector, notwithstanding ongoing market disruptions. FY25 sales volumes are expected to be slightly softer than expected (c.3%) but this is offset by continued improvements in gross margins such that our FY25 EBITDA and adj. PBT are unchanged. Further, following a good run of customer wins, visibility has improved over both the remainder of FY25 and FY26. Tariffs are being managed effectively with CTA’s cost-leading proposition and manufacturing flexibility key differentiators, leading to share gains. We believe there is a substantial disconnect between the group’s valuation (FY25 PER 4x, EV/EBITDA 3.5x) and the growth opportunity (FY24-FY26 sales growth of 12% and adj. PBT increasing 41%). BUY reaffirmed.
