Eagers Automotive (ASX: APE) and Emeco Holdings (ASX: EHL)
Hi Market Matters Team Can I have your current view on APE - Eagers and EHL -Emeco. Emeco announced a trading update yesterday and fell by 4.5%. Do you see a recovery in EHL? regards Debbie
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Answer
Hi Debbie,
Eagers Automotive (ASX: APE) $22.40: We recently discussed APE after a mixed trading update in late May here. Our view hasn’t changed: We are bullish from ~$22, and see Eagers testing the $25 resistance area, but a test of this year’s high, close to $30 wouldn’t surprise.
Emeco Holdings (ASX: EHL) 97c: For subscribers not familiar with EHL, its Australia’s largest mining equipment rental business, providing heavy earthmoving equipment and related services to mining companies across the country. Their trading update on Thursday pushed the stock down to new 2026 lows, not helped by a downgrade by Macquarie Bank and a several other brokers following the disappointing guidance:
- Emeco guided to FY26 operating EBITDA of $290–295m, roughly 5% below expectations, prompting the aforementioned downgrades.
EHL’s earnings guidance disappointed, but its balance sheet remains a key strength. They still expect to generate $100–110m of annual free cash flow, with net leverage falling to just 0.4x well below its long-term target. The strong balance sheet supports both capital management initiatives, including a potential special dividend, and further M&A – Emeco is actively assessing acquisition opportunities.
We believe EHL is interesting below $1 but how it utilises its free cash will likely determine the next 20% for the stock, hence, to answer your question we can see a recovery if the board pull the right levers.
