ARB Corporation Ltd (ASX: ARB) shares had a bit of a shocker yesterday when the company reported its first-half results, and to be honest, the shares have had a pretty rough trot over the past 12 months.
ARB shares bounced back strongly today, up 12.9% to $24.12, but they are still 37.1% lower than a year ago and 24.4% lower than at the start of this calendar year.
The good news for investors is that three brokers who've had a look at the result all believe the company has a strong core business, and two have particularly bullish 12-month price targets on the stock.
More on that later, but let's first have a look at what the company reported this week.
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Soft profit result
ARB said in a statement to the ASX on Tuesday that sales revenue fell 1% in the first half to $357.9 million, while net profit was 17.2% lower at $42.2 million.
The company also kept its fully-franked dividend steady at 34 cents per share.
The company said sales to the Australian aftermarket fell 1.7%, "affected by lower new vehicle sales for ARB's core model platforms and the ongoing shortage of accessory fitment resources''.
The company added:
Deliveries of vehicles core to ARB's sales were flat in 1H FY2026. In particular, sales of a number of key new vehicle models declined such as the Ford Ranger (-1%), Ford Everest (-9%), Land Cruiser 70 Series (-12%) and Isuzu D Max (-13%). The LandCruiser Prado recorded a 67% increase in sales for the half, reflecting the significantly lower volumes in the prior period due to the model changeover.
Sales to export markets were 8.8% higher, the company said, driven by 26.1% growth in the US, offset by flat sales in the rest of the world.
The company added:
Sales growth in the United States continues to be well supported by the company's strategic relationship with Toyota US, the strong performance of the US e-commerce platform launched in 2024, an accelerated new product programme led by a dedicated US engineering team and expanding wholesale channel activity.
ARB said it had launched a direct-to-consumer e-commerce site in February, which should also bolster sales.
In terms of the profit fall, the company said the strong Thai baht had an impact; however, the company had largely hedged its baht exposure for the second half of the year.
On the outlook, the company said it expected the Australian market to remain challenging, while the outlook for the offshore market "remains positive''.
ARB shares looking cheap
The analyst teams at Morgan Stanley, UBS, and RBC Capital Markets all had a look at the result and are positive on the outlook for the company.
The UBS team said that while the Australian market did indeed look challenging, they believed the business' fundamentals were strong.
They said:
We take a step back and look at the strength of the ARB brand. We don't believe the brand/business is broken, we are excited by the expansion opportunity in the US and ARB has significantly derated. ARB's share price has fallen 34% since mid Jan26 – We see this as an opportunity to buy a high-quality company on depressed earnings.
UBS has a price target of $25.50 on ARB shares.
RBC Capital Markets has a much more bullish price target of $45 on ARB Corporation shares, saying there were clear positives out of the result, including the US sales growth and "upbeat outlook commentary across the Aftermarket, Export and US supporting an improved FY26 outlook''.
Morgan Stanley, meanwhile, has a price target of $44 on ARB Corporation shares.
