BMO Capital Markets initiated coverage on RB Global with an Outperform rating. Analysts expect the vehicle marketplace company to benefit from a shift among auto insurers, who are increasingly inclined to sell damaged cars rather than repair them.
This presents growth opportunities for RB’s auto salvage business, as well as its heavy equipment division, formerly Ritchie Bros. Auctioneers, which BMO sees as well-positioned in a counter-cyclical industry.
The analysts set a price target of $105 for RB, valuing the company’s two key segments: auto salvage and heavy equipment sales. The rising average age of vehicles contributes to a growing auction volume, as older vehicles with costly repairs are more frequently scrapped.
RB Global’s strategic acquisition of IAA, a $7 billion deal completed last year, is also expected to enhance its market positioning.
Sources msn.com seekingalpha.com
