Citi says challenges to continue for Australia's ARB Corp

ARB

04/05/2022 23:56

** Analyst at Citi says FY22 revenue guidance of vehicle
accessories maker ARB Corp  ARB.AX  was weaker than expected
   ** The co on Wednesday said it sees FY22 revenues of ~A$700
mln ($507.36 mln), which is 2% below Citi's estimates
 urn:newsml:reuters.com:*:nASX3pvWwq
    ** Citi cuts PT to A$46.63 from A$48.15; maintains rating at
"buy" 
    ** While ARB's order book remains 'consistently high', we
see challenges continuing in 4Q22 and FY23 - Citi
    ** Citi says challenges to continue on back of potential
interest rate hikes could adversely impact demand for auto
products with new car supply taking longer to normalise on
congestion in China ports due to city's prolonged lockdowns,
among others 
    ** We cut FY22 to FY24 NPAT estimates by -2% to -3% taking
into account the weaker-than-expected FY22 sales guidance - Citi
    ** However, Citi sees co's investment in a new production
facility in Thailand as positive and indicates ARB's confidence
in future growth opportunities 
    ** Six of nine analysts rate the stock "buy" or higher,
three "hold"; their median PT is A$48.15– Refinitiv Eikon data 
    ** YTD stock is down nearly 36% 
    



($1 = 1.3797 Australian dollars)

 (Reporting by Navya Mittal in Bengaluru)
 ((navya.mittal@thomsonreuters.com))