TD Newcrest Upgrades Ritchie Bros (RBA) to Hold; Few Changes to Our Forecast Despite Weaker-than-Expected Q2

TD Newcrest upgraded Ritchie Bros (NYSE: RBA) from Reduce to Hold, price target increased from $22 to $24.

TD analyst says, "Ritchie Bros.’ Q2/11 results have limited implications for our view of its earnings power this cycle for two reasons: 1) the company’s new fee structure kicked in at the beginning of Q3/11 and should increase the auction revenue rate by ~70 bps and >100 bps in 2011 and 2012, respectively; and 2) we view Ritchie Bros. as more of a mid-cycle performer, and expect the company to generate strong earnings growth once OEM production levels have recovered for a period of time and the used equipment fleet has been repopulated. At this point in the cycle, the company’s earnings reflect stronger used equipment prices and a short supply of late model used equipment."

For more ratings news on Ritchie Bros click here and for the rating history of Ritchie Bros click here.

Shares of Ritchie Bros closed at $23.90 yesterday.

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