Citi cautious on ARB recovery, Morningstar sees value

Citigroup

15/10/2026 23:10

** Citi maintains "neutral" rating on ARB Corporation ARB.AX 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;))