DCC plc (DCC – Research Report), the Energy sector company, was revisited by a Wall Street analyst today. Analyst Jacob Armstrong from Stifel Nicolaus maintained a Buy rating on the stock and has a p7,200.00 price target.
Confident Investing Starts Here:
- Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions
- Receive undervalued, market resilient stocks straight to you inbox with TipRanks' Smart Value Newsletter
Jacob Armstrong has given his Buy rating due to a combination of factors that highlight DCC plc’s strong financial position and strategic initiatives. The company has demonstrated robust cash generation, with a free cash flow conversion rate of 84%, which provides significant financial flexibility for future mergers and acquisitions. Additionally, the planned sale of the Healthcare division is expected to generate £800 million, with a substantial portion of these proceeds set to be returned to shareholders, enhancing shareholder value.
Furthermore, DCC plc’s focus on operational efficiency and strategic restructuring, particularly in its Technology division, is expected to drive future growth. The company has exited smaller, loss-making operations to concentrate on more profitable areas, which aligns with its strategic focus on the Energy sector. The attractive valuation, supported by global decarbonization trends, and the company’s track record as a quality compounder, further reinforce the Buy rating.