OUR QUEST IS NOT TO BE BULLISH OR BEARISH, BUT TO CORRECTLY ASSESS FUTURE TRENDS

Citi rates ARB as Neutral

Citi believes already challenging conditions in the Australian automotive market continue to deteriorate, creating a difficult backdrop for ARB Corp

May new vehicle sales data showed a further weakening in ARB's core pick-up and 4x4 market, with volumes falling -18% year-on-year, compared with a -2.3% decline for the broader vehicle market.

Passenger vehicle sales also weakened, the broker highlights, while medium SUV sales continued to grow, driven by electric and plug-in hybrid models.

While ARB recently announced increased investment in engineering, the broker questions whether this will be sufficient to offset the changing vehicle mix and ongoing cost-of-living pressures.

Neutral. Target $17.40.

Bell Potter rates BIO as Buy

Biome Australia is introducing contract manufacturing in its home market of Australia, to assemble and package its activated probiotics range. The initial two-year term with Specialty Probiotics Australia is on an exclusive basis and subject to meeting quality and delivery standards.

The company will retain EU supply arrangements for EU markets. There is no upfront expenditure required for the contract and gross margins are expected to rise to more than 65% over 18 months from the first batch in September, along with eliminating extended sea freight time.

Bell Potter does not change estimates and awaits evidence of gross margin improvement but believes, conceptually, this is a positive development that should enhance operating leverage.

Buy rating and $1 target are unchanged.

Macquarie rates SLC as Downgrade to Neutral from Outperform

Macquarie notes Superloop upgraded FY26 earnings (EBITDA) guidance to $118m-$122m from $112m-$120m. The midpoint of the upgrade aligns with consensus, but is lower than the analyst's forecast of $123m.

Notably, targets for FY29 were described as supercharged, with revenue over $1bn and around $200m in underlying earnings (EBITDA), implying a CAGR in EPS of 35%. The analyst forecasts Superloop can achieve these targets through organic growth.

Management lifted prices only on the sub-100Mbps plans and raised them by more than competitors. The analyst highlights the Smart Communities valuation is "longer-dated".

EPS forecasts are raised by 6.6% for FY27, with a lift in the target price by 5.7% to $3.70. The stock is downgraded to Neutral from Outperform.