RBA - RBC voices bullishness on Ritchie Bros post IAA acquisition

2023-03-21 09:14:00 ET

RBC reinstated bullish coverage on Ritchie Bros. ( NYSE: RBA ) on Monday as the acquisition of IAA Inc. “provides a significant multi-year opportunity,” according to the bank’s analysts.

Equity analyst Sahaba Khan indicated that the acquisition should drive growth and unlock cost-savings for the overall company. She indicated that stated cost synergies of $100M to $120M look eminently achievable while revenue upside would be “a cherry on top.” As such, the modest valuation the auction company now sports provides “a very attractive entry point” for investors at present.

“Following the closing of the IAA acquisition, we believe Ritchie Bros. is well positioned to deliver significant top-line and earnings growth over our forecast horizon, driven by growth in its base/legacy business and contribution from the IAA-related synergies,” Khan concluded.

She assigned the stock a $70 price target and an Outperform rating. Shares of Ritchie Bros. Auctioneers ( RBA ) rose 1.4% shortly before Tuesday's market open.

Read more on RBA’s aims for the newly combined company .

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