The trading update for FY21 was ahead of Macquarie’s expectations as conditions remain buoyant and the order book is consistently strong, underpinning the first half of FY22. FY21 pre-tax profit is anticipated at $145-150m.
The broker suspects trading conditions in the Australian aftermarket will remain strong while the international border is shut, but there is some risk that sales activity in key export markets will decrease as travel restrictions, i.e. in the US, are unwound.
This could be a leading indicator for the Australian business when travel normalises. Neutral maintained. Target rises to $40.10 from $36.10.
Sector: Automobiles & Components.
Target price is $40.10.Current Price is $41.39. Difference: ($1.29) – (brackets indicate current price is over target). If ARB meets the Macquarie target it will return approximately -3% (excluding dividends, fees and charges – negative figures indicate an expected loss).
