ARB (ASX:ARB) share price on watch after reporting stellar FY2021 growth

ARB was on form in FY 2021…

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The ARB Corporation Limited (ASX: ARB) share price will be one to watch on Thursday.

This follows the release of a market update by the 4×4 parts manufacturer after the market close.

How is ARB performing?

The good news for shareholders and the ARB share price, is that ARB has been performing very positively in FY 2021.

According to the release, the company achieved unaudited sales revenue of $623 million for the 12 months ended 30 June 2021. This represents an impressive increase of 33.9% over the prior corresponding period.

Pleasingly, things have been even better on the bottom line thanks to margin expansion. The release reveals that ARB is expecting its profit before tax for FY 2021 to be within the range of $145 million to $150 million.

This will be an increase of 85.5% to 92% on FY 2020’s profit before tax of $78.1 million. Though, it is worth noting that its growth has slowed a touch since the end of the first half. At that point, its profit before tax was up 109.6% on the prior corresponding period.

Outlook

While the company is positive on its short term outlook, once again it believes COVID-19 uncertainty makes it impossible to provide any guidance beyond this.

It advised: “The Company maintains a positive short-term outlook based on its consistently strong customer order book. ARB is focused on managing input costs and global supply chain pressures whilst pursuing various market opportunities. The current pandemic and economic conditions remain very uncertain and it is not possible to provide financial or operational guidance beyond the short term.”

Is the ARB share price in the buy zone?

One leading broker that sees value in the ARB share price is Citi.

According to a recent note, the broker has a buy rating and $45.95 price target on its shares. This compares to the latest ARB share price of $41.39.

Though, its analysts are likely to revise its forecasts in the coming days to reflect this update. So, stay tuned for that.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ARB Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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