Citi cautious on ARB recovery, Morningstar sees value

** Citi maintains "neutral" rating on ARB Corporation ARB.AX and cuts its price target to A$17.95, citing weaker-than-expected sales and uncertainty around when vehicle supply issues would normalise

** Brokerage cuts FY27 and FY28 EPS forecasts by 5% and 6%, respectively, reflecting softer sales trends

** Says supply disruptions affecting the Toyota Hilux and Ford Ranger

** Adds higher fuel prices and interest rates, continue to weigh on discretionary demand

** Says recovery in Ford Ranger supply appears to be underway, though a recovery in Toyota volumes remains less clear

** Morningstar maintains its A$25 fair value estimate on ARB, saying the market is overly focused on cyclical weakness in consumer sentiment and lower sales of key vehicle models

** Says ARB enjoys pricing power in Australia and expects earnings growth to return as domestic margins recover and sales of key pickup models improve

** Adds ARB shares are undervalued and expects earnings growth to return as domestic margins recover from cyclical lows

** YTD, ARB down 47.3%, as of last close