If you are on the hunt for some big returns, then it could be worth checking out the ASX 200 stock in this article.
That's because the team at Macquarie Group Ltd (ASX: MQG) is bullish on it and believes that double-digit returns are on offer for buyers at current levels.
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Which ASX 200 stock?
The stock that Macquarie is tipping as a buy is ARB Corporation Ltd (ASX: ARB).
It is a designer, manufacturer, distributor, and seller of motor vehicle accessories focused on the 4×4 and offroad markets.
Macquarie was reasonably pleased with the ASX 200 stock's results and particularly its strong export momentum, which bodes well for FY 2026. It explains:
FY25 sales grew +16% yoy with APAC/ EMEA/ Americas up +15%/ +12%/ +21%. Americas growth was driven by 1) ORW and 4WP retail networks; 2) e-commerce site launch; 3) establishment of a US engineering team; and 4) Toyota strength. We have lifted our FY26 export sales to +15% (+9% prior) given 1) strong momentum in key markets expected to continue into FY26; 2) US strategy inc. ORW/4WP starting to bear fruit, 3) further OE contract announcements; and 4) ongoing investment in new products, e-Com platforms, model expansion.
It also notes that its performance in the local market was solid against a tough end market. Macquarie adds:
FY25 sales were flat yoy materially outperforming our 4×4 NVS index, which was down -12.3%. We fcst FY26 growth of +5% which should be achievable given 1) 4Q25 exit rate (+2.5%); 2) potential rate cuts; 3) daily order intake strength; and 4) ARB's typical outperformance vs NVS, which mgmt expects will be flat in FY26.
Time to buy
According to the note, the broker has reaffirmed its outperform rating with an improved price target of $44.90 (from $43.70).
Based on the current ARB share price of $39.86, this implies potential upside of 12.5% over the next 12 months.
In addition, Macquarie is forecasting a 76.3 cents per share dividend in FY 2026. This equates to a 1.9% dividend yield, which boosts the total potential return to approximately 14.5%.
Commenting on its outperform recommendation, the broker said:
Outperform. Solid result in Export with Australia outperforming a soft market. 2H trends & outlook commentary points to improving confidence in the growth strategy, with multiple updates expected at the AGM.
Catalysts: AGM update, Export segment momentum, better trends in Australia NVS, strategic M&A, major OEM deals in US.
