Morgan Stanley analyst Chenny Wang has lowered his target price for ARB Corporation Ltd by 13% to A$40.00 but retained an ‘Overweight’ rating, urging investors to consider buying on any weakness arising from the August 1 deadline for reciprocal tariff negotiations with the United States.
Wang flagged the potential for a “wide range of outcomes” on tariff discussions and associated share price volatility, but maintained a positive outlook on ARB, describing the company as a “compelling opportunity to buy an intact global growth story, already trading at a discount to the five-year average.”
He noted ARB is trading on 26 times FY26 and 23 times FY27 consensus earnings per share estimates — below its five-year average of 28 times — reflecting lingering uncertainty.
Wang is particularly focused on forthcoming clarity regarding the impact of steel, aluminium and reciprocal tariffs on ARB’s product range and margins, and any mitigation strategies the company may adopt.
“Clarity on tariffs will provide scope to look through — as market expectations are reset, we think the stock will start to trade to FY27 earnings,” Wang wrote.
Despite near-term risks, Wang remains confident in ARB’s long-term trajectory, citing a resilient structural growth outlook.
ARB shares are currently down 0.2% today to $34.860.