Morgan Stanley has moved Aramis Group to an Overweight rating from Equal-weight and reduced its price target to €5, saying that much of the company’s near-term weakness is already reflected in the stock. The €5 target - down from a prior €7 target - implies roughly 20% upside versus the current share price, according to the brokerage.
The bank said it trimmed its forecasts after lowering expectations for fiscal 2026 and 2027 in light of softer market conditions, recent leadership transitions in the UK and Austria, and company guidance that fell short of earlier hopes. Morgan Stanley now models fiscal 2026 volumes of about 121,000 vehicles and adjusted EBITDA of €56 million, which equates to an adjusted margin near 2.3%.
Describing fiscal 2026 as a transition year, the note highlights that cost controls and internal efficiency measures are expected to support profitability even if the broader market remains flat. The bank pointed to the company’s efforts to target purchasing efficiencies through expanded use of artificial intelligence as part of that internal improvement program.
On the market backdrop, Morgan Stanley said the European used car sector has shifted out of the post-pandemic phase of volatility into a slower period, with momentum flattening across major markets. The bank anticipates near-term growth will stay subdued, before returning to low single digit percentage gains in fiscal 2027 and 2028.
Despite the lowered near-term outlook, Morgan Stanley judged consensus forecasts to be too pessimistic and expects Aramis to resume mid single digit volume growth in 2027 as the wider market improves and recent leadership changes take effect. The broker also noted that the company has emphasised margin preservation over scaling in an increasingly competitive environment.
Finally, Morgan Stanley said there is upside potential if management shifts toward a credible growth strategy that builds scale - a scenario the bank described as a bull case with scope for stronger gains. The upgrade and adjusted price target reflect the combination of reduced estimates and a share price that has fallen about 47% over the last 12 months, which the bank says has already priced in much of the negative news.
Context and implications: The brokerage’s stance balances lowered near-term forecasts with the view that current valuation already captures much of the downside, while flagging potential upside tied to execution on efficiency and any credible pivot toward growth.