ARB (ASX:ARB) "significantly" bolstered its market position in the US over the past five years despite a poor stock performance, Jefferies said in a Tuesday note.

The company's weak stock performance was driven mostly by excessive initial valuation metrics and the weak consumer cycle in Australia.

Gross profit margins for the second half of the year are anticipated to be in line with the same period last year, according to Jefferies.

Australian aftermarket new vehicle supply of key 4x4 models is lagging behind fiscal 2025, but order book remains healthy, with daily order intake nearing historical highs.

The company remains a high-quality, net cash global industrial company despite a tough Australian consumer cycle and a 10% year-to-date decline in sales volumes for new accessorized 4x4/truck units, the financial services firm said.

Jefferies maintained its buy rating and AU$25 price target on ARB.

ARB shares rose 2% in afternoon trade Tuesday.