RB Global's (RBA) IAA salvage yard operations have more room to improve processing and vehicle cycle times through greater use of technology and automation, RBC Capital Markets said in a Tuesday note.

A site tour of a 50-acre yard near Toronto provided insight into vehicle processing, inventory management, sales and dispatch, with cycle times across IAA operations declining about 20% since the IAA acquisition closed in March 2023, RBC said.

Management noted AI and automation are being used to speed vehicle intake and dispatch, while improved initial vehicle imagery could potentially cut processing time by about 50%, according to the report.

Longer term, RB Global sees potential to automate most dispatch processes over the next three to five years, while focusing on reducing storage and rental charges for insurance customers and improving yard capacity and efficiency, the report added.

RBC reiterated its outperform rating on the stock with a price target of $152.

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