RB Global's (NYSE:RBA) turnaround story is gaining traction as the industrial auctioneer steadies after a volatile year, with easing auto market headwinds and improving construction demand positioning 2026 as its first "clean year" since the IAA acquisition, a potential springboard for renewed growth momentum.
Bank of America analyst Michael Feniger upgraded RB Global to Buy from Neutral with a price forecast of $120, citing an improving risk-reward profile following a share price pullback.
Near-Term Headwinds and 2026 Growth Outlook
The analyst said recent headwinds, including limited catastrophic events and softness in repairable claims, could weigh on near-term performance. The bank views 2026 as RB's first clean year since its IAA acquisition, marking a return to steady growth.
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The brokerage expects gross transaction value (GTV) to rise from flat levels in 2024-2025 to mid-single-digit growth in 2026, improving further into 2027 as Commercial, Construction & Transportation (CC&T) recovers and the auto segment gains share.
With operational leverage and disciplined execution, RB is positioned to evolve into a consistent double-digit EBITDA compounder, supported by strong free cash flow and reduced cyclicality.
Salvage Business Fundamentals Remain Strong
As the noise around auto credit issues fades, the fundamentals of RB's salvage business stand out. Rising repair costs and growing vehicle complexity continue to differentiate the salvage market from general used-car activity.
Although tighter household budgets may lead some consumers to skip minor repair claims, the overall effect is limited. Drivers might overlook a minor $1,000 fix, but major $10,000 accidents will still drive vehicles into the salvage channel.
Auto and Commercial Segment Growth Drivers
Bank of America sees RB's auto vertical, which accounts for about 54% of GTV, as a key growth engine. The integration of IAA provides a pathway to regain lost market share (currently 35%, down from 50%) from competitor Copart (NASDAQ:CPRT).
RB's legacy CC&T segment, which accounts for about 34% of GTV, has seen a downturn over the past year but is expected to stabilize in 2026, supported by increased truck bankruptcies, rental operators raising capex, and bifurcated construction.
The bank now projects RB Global's 2025 EPS at $3.71, slightly lower than its prior estimate of $3.80, followed by $4.30 in 2026 and $4.80 in 2027 trimmed from $4.90 previously.
Revenue forecasts were also adjusted modestly, with 2025 revenue at $4.54 billion (down from $4.61 billion), $4.87 billion for 2026 (revised from $4.99 billion), and $5.29 billion for 2027 (reduced from $5.42 billion).
Bank of America's $120 price forecast is based on 17.5x 2025E EV/EBITDA, in line with peers in industrial services.
Price Action: RBA shares were trading higher by 2.44% to $103.90 at last check Tuesday.
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