Bank of America Merrill Lynch Reiterates Buy Rating, $24 PT on Ritchie Bros. Auctioneers
In a report published Monday, Bank of America Merrill Lynch reiterated its Buy rating and $24.00 price target on Ritchie Bros. Auctioneers (NYSE: RBA).
BofA Merrill Lynch noted, “Ritchie stock was down 4% on Dec-7th on news that CAT plans to invest an undisclosed sum in CAT Auction Services. CAT Auction Services has already been in business since 2008, when it was formed as a partnership between five dealers and has since expanded to 20+ dealers. The “new news” is that CAT is putting some “skin in the game” by making its first investment in the service. CAT is not disclosing the size of the investment, but the fact that CAT did not put out its own press release suggests that is more of a goodwill gesture to the dealer network than a key strategic move, in our view. Ultimately, we think the motivation of CAT and its dealer network is to keep more of its equipment ‘in network' is to drive parts and services business, rather than becoming anything close to a full-blown competitor to Ritchie Brothers.”
Ritchie Bros. Auctioneers closed on Friday at $21.18.
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