RBA:CC - Ritchie Bros. lands bull rating at BofA with auction cycle looking strong

Bank of America upgraded Ritchie Bros. Auctioneers Incorporated ( NYSE: RBA ) to a Buy rating from Neutral with cyclical and secular drivers seen aligned to support outperformance.

The firm thinks RBA is well positioned for the next auction cycle, which is noted to typically kick off in industrial slowdowns.

Analyst Michael Feniger: "RBA is the largest auctioneer of industrial equipment in the world. Ritchie is a high quality company with strong market share and favorable long-term growth drivers. We believe RBA's earnings prospects is likely to improve as the tight used equipment thaws into 2023 and growth initiatives start to bear fruit."

BofA's price objective of $75 works out to 30X the 2023 estimate, the high end of the historical range of 20X to 35X. The firm notes the multiple is typically elevated in economic slowdowns given its track record of growth in recessions.

Shares of RBA moved up 0.60% premarket on Thursday to $60.70 vs. the 52-week trading range of $48.65 to $76.18.

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