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Citi rates ARB as Downgrade to Neutral from Buy

On further inspection, Citi is downgrading the stock to Neutral from Buy until there is more certainty and confidence around management dealing with declining aftermarket sales in Australia.

The analyst sees both structural and cyclical headwinds for that business but remains upbeat on the US business. EPS forecasts are lowered by -2% for FY26-FY28 on lower margins and sales estimates. The target price is cut to $22.05 from $42.25, down more than -50%.

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At first glance, Citi notes interim profit for ARB Corp of $42.2m is broadly in line with the consensus estimate, while the interim dividend of 34c came in ahead of the 28.9c forecast.

The broker highlights 26.1% US sales growth and improving ORW/4WP profitability, but notes Australian aftermarket sales fell -1.7% and OEM revenue declined -38%. Margins were pressured by currency and lower factory recoveries, explain the analysts.

Management guides to an improved 2H26 performance versus 1H and broadly flat margins year-on-year, though Citi expects consensus 2H profit growth forecasts will need to be trimmed.

Citi questions whether greater reinvestment may be required to reinvigorate core growth.

Buy rating. Target $42.25.

Macquarie rates MAD as Outperform

Macquarie rates Mader Group Outperform and lowers its target price to $10.20 from $10.40 following the 1H26 result.

The broker highlights 1H26 revenue growth of 18% y/y, with Australia up 19% and North America up 13%, and notes the company has achieved 49% of its $1bn-plus revenue target and 47% of its $65m-plus net profit after tax target under the five-year plan.

Earnings (EBITDA) margins softened to 11.6% due to around -$6m in additional bonus provisions and inflationary pressures, management expects stronger 2H margins as provisions normalise.

The growth outlook in Australia is viewed as positive and “far from saturated”, with North America seeing an accelerating pipeline and circa 100 unfilled roles, and potential for M&A under a revised strategy expected in Apr/May.

Earnings forecasts are tweaked down for FY26/FY27/FY28 by -3%/-3%/-4%, respectively, reflecting modest downgrades to revenue growth and margins.

Citi rates NXT as Buy

Citi expects NextDC to announce an inline result and forecasts 1H26 earnings (EBITDA) of $111m, up 5% and 2% above consensus due to marginally higher revenue.

The market is expected to focus on the update regarding the JV partner for S4/S7 development and funding, with circa -$4.3bn in capex over the next two years, the analyst explains.

Citi remains upbeat on the data centre environment and points to NextDC's headcount up 11% y/y as at Dec 2025.

Earnings (EBITDA) forecasts for FY27 are upgraded by 12% to reflect higher than expected contract wins in 1H26, which should flow to billing in FY27.

Buy rated with a $19 target price.