BUZZ — Citi cautious on ARB recovery, Morningstar sees value
* Citi maintains "neutral" rating on ARB Corporation and cuts its price target to A$17.95, citing weaker-than-expected sales and uncertainty around when vehicle supply issues would normalise * Brokerage cuts FY27 and FY28 EPS forecasts by 5% and 6%, respectively, reflecting softer sales trends * Says supply disruptions affecting the Toyota Hilux and Ford Ranger * Adds higher fuel prices and interest rates, continue to weigh on discretionary demand * Says recovery in Ford Ranger supply appears to be underway, though a recovery in Toyota volumes remains less clear * Morningstar maintains its A$25 fair value estimate on ARB, saying the market is overly focused on cyclical weakness in consumer sentiment and lower sales of key vehicle models * Says ARB enjoys pricing power in Australia and expects earnings growth to return as domestic margins recover and sales of key pickup models improve * Adds ARB shares are undervalued and expects earnings growth to return as domestic margins recover from cyclical lows * YTD, ARB down 47.3%, as of last close (Reporting by Paridhi Minda in Bengaluru) ((Paridhi.minda@thomsonreuters.com;)
* Citi maintains "neutral" rating on ARB Corporation and cuts its price target to A$17.95, citing weaker-than-expected sales and uncertainty around when vehicle supply issues would normalise * Brokerage cuts FY27 and FY28 EPS forecasts by 5% and 6%, respectively, reflecting softer sales trends * Says supply disruptions affecting the Toyota Hilux and Ford Ranger * Adds higher fuel prices and interest rates, continue to weigh on discretionary demand * Says recovery in Ford Ranger supply appears to be underway, though a recovery in Toyota volumes remains less clear * Morningstar maintains its A$25 fair value estimate on ARB, saying the market is overly focused on cyclical weakness in consumer sentiment and lower sales of key vehicle models * Says ARB enjoys pricing power in Australia and expects earnings growth to return as domestic margins recover and sales of key pickup models improve * Adds ARB shares are undervalued and expects earnings growth to return as domestic margins recover from cyclical lows * YTD, ARB down 47.3%, as of last close (Reporting by Paridhi Minda in Bengaluru) ((Paridhi.minda@thomsonreuters.com;)