Diploma PLC (GB:DPLM)
LSE:DPLM
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Diploma
(LSE:DPLM)
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Rating:73Outperform
Price Target:
7,660.00 p
▲(9.98% Upside)
Action:Reiterated
Date:03/26/26
The score is driven primarily by strong financial performance (growth, improving margins, and robust free cash flow) and supportive technical momentum. Corporate events are generally favorable with upgraded outlook and strong trading, though governance-related shareholder pushback adds some risk. The main constraint is valuation, with a high P/E and modest yield.
Positive Factors
Strong free cash flow conversion
Consistently high free cash flow (up ~63% in 2025) and FCF near 0.88–0.95x net income show strong cash conversion and earnings quality. This underpins durable funding for acquisitions, dividends and debt servicing, supporting strategic flexibility over the next several quarters.
Negative Factors
Higher absolute debt versus earlier years
Although leverage is moderate (~0.47) and improving, the materially larger absolute debt stock versus earlier years elevates refinancing and interest-rate risk. Continued strong earnings and cash conversion are required to control leverage and preserve financial flexibility over the next 2–6 months.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow conversion
Consistently high free cash flow (up ~63% in 2025) and FCF near 0.88–0.95x net income show strong cash conversion and earnings quality. This underpins durable funding for acquisitions, dividends and debt servicing, supporting strategic flexibility over the next several quarters.
Read all positive factors
Diploma (DPLM) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£9.21B
Dividend Yield1.13%
Average Volume (3M)312.85K
Price to Earnings (P/E)20.0
Beta (1Y)0.90
Revenue Growth13.31%
EPS Growth13.05%
CountryUK
Employees3,597
SectorIndustrials
Sector Strength72
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)1.41
Shares Outstanding134,317,400
10 Day Avg. Volume285,214
30 Day Avg. Volume312,846
Financial Highlights & Ratios
PEG Ratio0.88
Price to Book (P/B)7.19
Price to Sales (P/S)4.67
P/FCF Ratio28.09
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£7,114.00Price Target Upside2.14% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
EPS Forecast (FY)2.27
Revenue Forecast (FY)£1.74B
Diploma Business Overview & Revenue Model
Company Description
Diploma PLC, together with its subsidiaries, supplies specialized technical products and services in the United Kingdom, rest of Europe, North America, and internationally. It operates through three business sectors: Life Sciences, Seals, and Cont...
How the Company Makes Money
Diploma generates revenue by sourcing and distributing high-quality technical products and providing value-added services across its three main sectors. In the Life Sciences sector, the company earns income through the supply of medical and health...
Diploma Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
72
Positive
Cash Flow
83
Very Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.01B | 1.52B | 1.36B | 1.20B | 1.01B | 787.40M |
| Gross Profit | 432.55M | 377.70M | 628.90M | 261.00M | 335.30M | 288.40M |
| EBITDA | 506.45M | 368.60M | 296.10M | 254.00M | 203.50M | 138.40M |
| Net Income | 189.40M | 184.90M | 129.30M | 117.70M | 94.70M | 69.80M |
Balance Sheet | ||||||
| Total Assets | 1.97B | 1.86B | 1.77B | 1.59B | 1.39B | 994.00M |
| Cash, Cash Equivalents and Short-Term Investments | 68.70M | 81.70M | 55.50M | 62.40M | 41.70M | 24.80M |
| Total Debt | 501.40M | 464.90M | 552.10M | 397.30M | 439.70M | 254.50M |
| Total Liabilities | 912.00M | 862.60M | 877.40M | 687.30M | 721.50M | 453.00M |
| Stockholders Equity | 1.05B | 989.70M | 888.00M | 895.60M | 662.00M | 536.30M |
Cash Flow | ||||||
| Free Cash Flow | 268.20M | 253.20M | 178.40M | 166.10M | 109.60M | 109.90M |
| Operating Cash Flow | 283.90M | 267.60M | 198.10M | 189.20M | 125.00M | 116.10M |
| Investing Cash Flow | -147.40M | -31.30M | -294.80M | -270.90M | -172.20M | -447.70M |
| Financing Cash Flow | -132.10M | -212.90M | 90.30M | 107.50M | 64.70M | 139.00M |
Diploma Technical Analysis
Positive
6965.00
Price Trends
6367.90
Positive
5919.16
Positive
5642.44
Positive
Market Momentum
82.25
Positive
55.16
Neutral
30.75
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:DPLM, the sentiment is Positive. The current price of 6965 is above the 20-day moving average (MA) of 6898.25, above the 50-day MA of 6367.90, and above the 200-day MA of 5642.44, indicating a neutral trend. The MACD of 82.25 indicates Positive momentum. The RSI at 55.16 is Neutral, neither overbought nor oversold. The STOCH value of 30.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:DPLM.
Diploma Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | £3.27B | 8.02 | 11.47% | 3.58% | -2.44% | -6.43% | |
73 Outperform | £9.21B | 19.96 | 14.17% | 1.13% | 13.31% | 13.05% | |
64 Neutral | £196.92M | 0.64 | 7.92% | 6.53% | ― | ― | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
50 Neutral | £36.47M | -2.87 | -8.17% | ― | 8.98% | 87.44% | |
47 Neutral | £98.10M | -0.98 | -47.73% | ― | -0.80% | -31.98% |
* Industrials Sector Average
GB:DPLM
Diploma
6,870.00
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42.63%
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Diploma Corporate Events
Business Operations and StrategyDividendsFinancial DisclosuresM&A Transactions
Diploma lifts full-year guidance after strong first half and acquisition-led growth
Positive
May 19, 2026
Diploma reported a strong first-half performance for the six months to 31 March 2026, with revenue up 17% to £851.1m and organic revenue growth accelerating to 15%. Adjusted operating profit rose 33% to £208.9m, lifting the adjusted oper...
Regulatory Filings and Compliance
Diploma Directors Boost Shareholdings in Regulated Market Dealings
Positive
Mar 23, 2026
Diploma PLC disclosed that Senior Independent Director Katie Bickerstaffe and Non-Executive Directors Geraldine Huse and Ian El‑Mokadem have increased their holdings in the company by purchasing ordinary shares on 19 and 20 March 2026. The t...
Business Operations and StrategyFinancial Disclosures
Diploma lifts FY26 outlook on strong trading and margin gains
Positive
Mar 18, 2026
Diploma has significantly upgraded its full-year 2026 guidance on the back of strong trading, lifting expected organic revenue growth to 9% from 6% and raising its operating margin target to around 25%. The changes imply about a 13% upgrade to con...
Business Operations and StrategyExecutive/Board Changes
Diploma PLC Strengthens Board with Appointment of Cheri Phyfer as Independent Non-Executive Director
Positive
Feb 27, 2026
Diploma PLC has appointed Cheri Phyfer as an independent non-executive director effective 2 March 2026, with roles on the Nomination and Remuneration Committees. Phyfer brings more than 30 years of industry experience, including senior leadership ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.