BUZZ - Citi remains cautious about the revival of ARB, while Morningstar is optimistic about its value

October 15 - ** Citi maintains its "Neutral" rating on ARB Corporation ARB.AX and lowers its target price to 17.95 AUD, citing weaker-than-expected sales and ongoing uncertainty over when vehicle supply issues will normalize.

** The broker cuts its earnings per share (EPS) forecasts for fiscal years 2027 and 2028 by 5% and 6%, respectively, reflecting a slowdown in sales trends.

** Notes that supply disruptions are affecting Toyota Hilux and Ford Ranger models.

** Adds that rising fuel prices and interest rates continue to dampen discretionary demand.

** Points out that supply recovery for the Ford Ranger appears to be underway, but the outlook for a rebound in Toyota sales remains unclear.

** Morningstar maintains its fair value estimate for ARB at 25 AUD, stating that the market is overly focused on cyclical weakness in consumer confidence and declines in sales of key models.

** Notes that ARB has pricing power in Australia and expects earnings growth to get back on track as domestic profit margins recover and sales of main pickup models improve.

** Adds that ARB’s share price is undervalued and expects earnings growth to resume as domestic profit margins rebound from cyclical lows.

** As of the last close, ARB has fallen 47.3% so far this year.

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