Bank of America Reiterates Neutral on Ritchie Bros. Auctioneers Following Global Industrials Conference

In a report published Wednesday, Bank of America analyst Ross Gilardi reiterated a Neutral rating and $23.00 price target on Ritchie Bros. Auctioneers

. In the report, Gilardi noted, “Earlier today, we hosted CFO Rob McLeod at our Global Industrials conference in London. We like Ritchie's business model, with drivers of caution being 1) valuation, 2) potential for tighter used construction equipment availability in 2H13, 3) lack of operating leverage due to growth in SG&A. Ritchie is focused on 1) driving sales force growth and productivity, and 2) improving at-risk performance. Ritchie achieved record gross auction proceeds (GAP) of nearly $4bn in 2013, but GAP growth has been more stagnant in recent years. To help, Ritchie is aiming to grow its sales force by 10% in 2013. To improve at-risk performance, Ritchie is tying sales force compensation more closely to ‘profitable GAP', to discourage riskier transactions that can potentially weigh on the auction revenue rate.” Ritchie Bros. Auctioneers closed on Tuesday at $21.05.