ARB: Returning to Sales Growth but Shares Expensive

ARB is returning to sales growth. Sales are up about 6% in the third quarter of fiscal 2024 after the first half was roughly flat, combining to year-to-date sales growth of about 2%. We had expected sales growth to pick up a bit quicker with improving vehicle supply, both globally and domestically. Compared with fiscal 2023, Australian new-vehicle sales are up about 16% financial year to March. This reflects exceptional growth in popular models in ARB's target market, such as the Ford Ranger and the Toyota HiLux, which are up 33% and 16%, respectively, year to date. We lower our fiscal 2024 revenue forecast by 2% to AUD 695 million, about 4% above fiscal 2023. The change is immaterial to our AUD 26 fair value estimate.