Can Bapcor’s (ASX:BAP) New CEO and Relaxed Leverage Covenants Reframe Its Turnaround Risks?

Simply Wall St.12-20 20:26

Bapcor recently announced that outgoing CEO Angus McKay will be replaced by automotive aftermarket veteran Chris Wilesmith as CEO and Managing Director from 14 January 2026, alongside an updated FY26 ...

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At the same time, Bapcor secured temporary lender approval to lift its net leverage covenant to 3.5 times adjusted EBITDA, giving the new leadership more balance sheet flexibility to execute the turnaround plan. We’ll now examine how Wilesmith’s appointment and added covenant flexibility could reshape Bapcor’s turnaround-focused investment narrative and risk profile. Rare earth metals are the new gold rush. Find out which 34 stocks are leading the charge.Bapcor Investment Narrative RecapTo own Bapcor today, you need to believe its turnaround can offset recent weak trading and guided FY26 Statutory NPAT loss of A$31 million to A$36 million. The key short term catalyst remains operational improvement under refreshed leadership, while the biggest risk is that ongoing restructuring, store closures and executive turnover fail to restore margins and earnings momentum. The latest guidance downgrade meaningfully heightens that execution risk. The most relevant announcement is the temporary relaxation of Bapcor’s net leverage covenant to 3.5 times adjusted EBITDA for the December 2025 and June 2026 testing dates. This added balance sheet flexibility supports the turnaround initiatives that underpin the investment thesis, but it also underlines the importance of delivering on cost savings, supply chain upgrades and network optimisation before the covenant heads back toward its prior settings. Yet investors should be aware that if restructuring efficiencies and cost savings stall, then... Read the full narrative on Bapcor (it's free!)Bapcor's narrative projects A$2.1 billion revenue and A$106.9 million earnings by 2028. This requires 2.2% yearly revenue growth and an earnings increase of about A$78.8 million from A$28.1 million today.Uncover how Bapcor's forecasts yield a A$3.21 fair value, a 53% upside to its current price.Exploring Other PerspectivesASX:BAP 1-Year Stock Price Chart Seven fair value estimates from the Simply Wall St Community span roughly A$2.62 to A$6.69 per share, showing how far apart views on Bapcor’s worth can be. Against this backdrop, the guided FY26 loss and raised leverage covenant sharpen the focus on whether the turnaround can offset execution risks to margins and earnings that many investors may be underestimating.Explore 7 other fair value estimates on Bapcor - why the stock might be worth just A$2.62!Build Your Own Bapcor NarrativeDisagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.A great starting point for your Bapcor research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.Our free Bapcor research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Bapcor's overall financial health at a glance.Curious About Other Options?These stocks are moving-our analysis flagged them today. Act fast before the price catches up:We've found 13 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.This technology could replace computers: discover 28 stocks that are working to make quantum computing a reality.Uncover the next big thing with financially sound penny stocks that balance risk and reward.  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.The New Payments ETF Is Live on NASDAQ:Money is moving to real-time rails, and a newly listed ETF now gives investors direct exposure. Fast settlement. Institutional custody. Simple access.Explore how this launch could reshape portfoliosSponsored ContentValuation is complex, but we're here to simplify it.Discover if Bapcor might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. 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