Bank Of America Upgrades Ritche Bros. Auctioneers To Buy

Bank of America upgrades Ritchie Bros. RBA to a Buy and raises the PT from $22 to $29. It forecasts earnings growth acceleration above management's target rate of 15% into 2H11 and 2012, driven by the return of the North American construction market to a more normalized state and higher fee structure as of July ‘11. It appears that RBA's large growth investments are largely complete, resulting in an attractive operating leverage with volume recovery into 2H11, which could provide upside to B of A's EPS estimates. While RBA's top-line and EPS growth is likely to remain lackluster in the next several quarters, B of A thinks it is largely anticipated by the Street and investors will look through it as the cyclical bottom. RBA is trading higher at $24.79