ARB is a 4-wheel drive accessories business that has performed badly since its late 2021 high, the company has struggled on a number of different operating fronts but as people tighten their belts things feel likely to deteriorate further before they improve. This is a company we like but the looming economic environment looks set to weigh on any businesses that depends on discretionary spending.
- We don’t believe the stock is cheap trading on a 20x for FY23 but it will be attractive to us if we see another leg down towards the $20 area.
MM likes ARB’s valuation into further weakness ~$20
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