Jacob Armstrong, an analyst from Stifel Nicolaus, maintained the Buy rating on DCC plc (DCC – Research Report). The associated price target was lowered to p7,200.00.
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Jacob Armstrong’s rating is based on DCC plc’s strategic decision to sell its Healthcare division, which is expected to simplify the company’s operations and focus on its core energy business. This sale is anticipated to provide substantial cash returns to shareholders and enhance the company’s financial flexibility, positioning it well for future growth. The transaction values the Healthcare division at an enterprise value significantly higher than the group’s current multiple, indicating a strong outcome despite macroeconomic challenges.
Additionally, the remaining divisions, particularly DCC Energy, are forecasted to generate substantial operating profits, contributing to the company’s attractive valuation. The group’s exposure to global decarbonisation trends and its solid track record further support the Buy rating. The anticipated cash returns from the sale, equivalent to a significant percentage of the current market cap, and the company’s strong balance sheet reinforce the positive outlook for DCC plc.
In another report released yesterday, Deutsche Bank also maintained a Buy rating on the stock with a £60.00 price target.
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