Australia's small-cap auto firms will gain from strength in new car sales - Citi

ARB

06/12/2022 19:54

** Citi says strong new car sales in November will bode well
for Australia's small-cap automotive firms like GUD Holdings Ltd
 GUD.AX  and ARB Corp Ltd  ARB.AX 
    ** However, brokerage remains cautious that by the time OEM
supply chains fully recover, car demand could start to fall from
increased cost of living and interest rates         
    ** Citi says Bapcor Ltd  BAP.AX  is its top pick in
small-cap auto due to its relatively less-discretionary product
offering
    ** Says both ARB and GUD will benefit as original equipment
manufacturer supply chains recover; sees ARB relatively better
positioned due to its export growth potential and a stronger
balance sheet
    ** Citi raises PT on GUD by 14% to A$10.0, upgrades stock to
"buy" rating
    ** On both ARB and BAP, brokerage maintains "buy" rating;
keeps PT of ARB (A$39.25) and BAP (A$7.96) unchanged
    ** YTD, GUD is down 28.2%, ARB down 44.2% and BAP is down
2.9%, as of last close 
 (Reporting by Poonam Behura in Bengaluru)
 ((Poonam.Behura@thomsonreuters.com;))