Annelies Vermeulen, an analyst from Morgan Stanley, maintained the Buy rating on Diploma. The associated price target remains the same with p6,400.00.
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Annelies Vermeulen has given his Buy rating due to a combination of factors tied to Diploma’s strong operational and strategic performance. The company delivered approximately 14% organic revenue growth in fiscal 1Q26, broadly in line with the robust trends seen in the second half of FY25 and well ahead of the full-year guidance of around 6%. Growth is being driven particularly by the Controls division, with businesses such as Peerless and Windy City Wire performing strongly, while Life Sciences continues to post mid-single-digit organic growth and North America Seals outpaces International Seals.
Annelies Vermeulen’s rating is based on the view that Diploma is executing a disciplined and accretive M&A strategy alongside its organic growth. The company completed four bolt-on acquisitions in the quarter, deploying roughly £75m at attractive valuation multiples and increasing its exposure to structurally attractive end markets such as aerospace fasteners, aftermarket hydraulic seals, OEM machining components, and defence. Management has reiterated FY26 guidance of about 6% organic growth and a 22.5% operating margin, and the newly announced deals are expected to drive modest upgrades to consensus operating profit and EPS. Overall, the combination of resilient volume-led growth, high-quality earnings compounding, and continued M&A execution underpins the Buy recommendation and supports the expectation that the shares should remain well supported.
In another report released yesterday, Berenberg Bank also maintained a Buy rating on the stock with a p6,600.00 price target.
Based on the recent corporate insider activity of 11 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of DPLM in relation to earlier this year.