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Diploma plc (GB:DPLM)
:DPLM
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Diploma (DPLM) AI Stock Analysis

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GB:DPLM

Diploma

(LSE:DPLM)

Rating:75Outperform
Price Target:
5,517.00p
▲(1.88% Upside)
Diploma PLC's strong financial performance and positive corporate events significantly contribute to its overall score. While technical indicators suggest a positive trend, the high valuation tempers enthusiasm, indicating potential overvaluation risks.
Positive Factors
Earnings and Financial Performance
Diploma delivered a strong 1H, with revenue up 14% and adjusted operating profit up 25% to £156.9m.
Guidance Upgrade
Diploma has raised its FY25E guidance, with full year organic growth now expected to be 10%.
Strategic Growth Initiatives
The group has invested approximately £39m in two acquisitions, indicating strategic growth initiatives.
Negative Factors
Acquisition Challenges
Deals have not progressed beyond due diligence for various reasons such as price and management quality.
Share Price Performance
The stock has experienced a weak recent share price performance, dropping 16% since President Trump's second inauguration.

Diploma (DPLM) vs. iShares MSCI United Kingdom ETF (EWC)

Diploma Business Overview & Revenue Model

Company DescriptionDiploma 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 Controls. The Life Sciences sector supplies clinical diagnostics instrumentation and products, consumables, specialty surgical devices, and related consumables and services to public hospitals, private clinics, pathology laboratories, scientific research, and medical segments; surgical equipment for hospital operating rooms; and distributes laboratory diagnostics, specialty medical devices, devices, equipment, and patient monitoring technologies used in operating theatres, as well as medically supervised nutrition. It also provides supplies specialist containment solutions and analyzers for chemical, petrochemical, environmental research, and pharmaceutical technology. The Seals sector supplies various seals, gaskets, filters, cylinders, components, and kits used in heavy mobile machinery and specialized industrial equipment; and O-rings, custom molded and machined parts, fluid sealing products, and hydraulic cylinder components. The Controls sector offers cable identification, termination, and management products, and cable products; low voltage cables and cable management solutions; harness components and specialist connectors, including protective sleevings, cut-to-length tubing, kitting, connector assemblies, and prototype quantities of customized multi-core cables; fasteners and related technical support, and other value-added services for civil aerospace, motorsport, defense, and general industries, as well as supports customers with automated inventory replenishment solutions; fluid controllers, compressors, valves, temperature and pressure measurement devices, and liquid dispensing components; and silicones, adhesives, and sealants. Diploma PLC was incorporated in 1931 and is based in London, the United Kingdom.
How the Company Makes MoneyDiploma PLC generates revenue through the distribution and sale of specialized products and services across its three key sectors. In the Life Sciences sector, the company provides consumables, instruments, and related services for the healthcare and environmental industries. The Seals sector offers a wide range of sealing products and related services to industrial customers, while the Controls sector supplies wiring, connectors, fasteners, and control devices for various applications. Diploma's earnings are bolstered by strong supplier relationships, a diverse customer base, and strategic acquisitions that enhance its product and service offerings.

Diploma Financial Statement Overview

Summary
Diploma exhibits robust financial performance with strong revenue growth, improved profitability, solid balance sheet metrics, and consistent cash flow generation. However, there remains room for operational efficiency improvements.
Income Statement
85
Very Positive
Diploma has demonstrated strong revenue growth, with a 13.6% increase from the previous year, indicative of a healthy expansion trajectory. The gross profit margin stands at 46.1%, showing effective cost management. The net profit margin has improved to 9.5%, reflecting increased profitability. However, the EBIT and EBITDA margins, at 15.2% and 21.6% respectively, suggest room for operational efficiency improvements.
Balance Sheet
78
Positive
The company's debt-to-equity ratio of 0.62 indicates moderate leverage, which is manageable but should be monitored. A healthy return on equity (ROE) of 14.6% showcases effective use of shareholder funds. The equity ratio is stable at 50.1%, suggesting a balanced capital structure. Overall, the balance sheet is solid, supporting stable financial health.
Cash Flow
80
Positive
Free cash flow has grown by 7.4%, signaling robust cash generation. The operating cash flow to net income ratio is strong at 1.53, indicating high cash conversion efficiency. The free cash flow to net income ratio of 1.38 further underscores solid cash flow management. The cash flow statement highlights the company's ability to reinvest and manage financial obligations effectively.
BreakdownSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income Statement
Total Revenue1.36B1.20B1.01B787.40M538.40M
Gross Profit628.90M261.00M335.30M288.40M194.40M
EBITDA296.10M254.00M203.50M138.40M99.80M
Net Income129.30M117.70M94.70M69.80M49.30M
Balance Sheet
Total Assets1.77B1.59B1.39B994.00M703.30M
Cash, Cash Equivalents and Short-Term Investments55.50M62.40M41.70M24.80M206.80M
Total Debt552.10M397.30M439.70M254.50M33.70M
Total Liabilities877.40M687.30M721.50M453.00M172.60M
Stockholders Equity888.00M895.60M662.00M536.30M527.00M
Cash Flow
Free Cash Flow178.40M166.10M109.60M109.90M76.00M
Operating Cash Flow198.10M189.20M125.00M116.10M85.40M
Investing Cash Flow-294.80M-270.90M-172.20M-447.70M-17.70M
Financing Cash Flow90.30M107.50M64.70M139.00M114.20M

Diploma Technical Analysis

Technical Analysis Sentiment
Positive
Last Price5415.00
Price Trends
50DMA
4947.60
Positive
100DMA
4495.09
Positive
200DMA
4429.14
Positive
Market Momentum
MACD
148.30
Negative
RSI
71.82
Negative
STOCH
81.65
Negative
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 5415 is above the 20-day moving average (MA) of 5208.30, above the 50-day MA of 4947.60, and above the 200-day MA of 4429.14, indicating a bullish trend. The MACD of 148.30 indicates Negative momentum. The RSI at 71.82 is Negative, neither overbought nor oversold. The STOCH value of 81.65 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:DPLM.

Diploma Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
£7.26B43.3318.41%1.11%15.75%44.11%
72
Outperform
£1.72B14.537.50%4.20%-1.59%-12.46%
71
Outperform
£223.77M
6.53%
66
Neutral
£2.71B12.663.89%3.22%2.72%-23.08%
61
Neutral
£2.60B16.9210.95%3.96%-1.32%-16.36%
56
Neutral
£193.93M29.513.43%5.57%7.23%-59.68%
50
Neutral
£147.69M-37.89%-2.08%-9.83%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:DPLM
Diploma
5,420.00
1,387.66
34.41%
GB:GFTU
Grafton
881.50
-85.05
-8.80%
GB:LTHP
James Latham
122.50
7.87
6.87%
GB:RS1
RS Group PLC
565.50
-162.67
-22.34%
GB:SHI
SIG plc
12.06
-11.94
-49.75%
GB:BRCK
Brickability Group PLC
61.00
-4.96
-7.52%

Diploma Corporate Events

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Diploma PLC Reports Strong Q3 and Announces Strategic Acquisitions
Positive
Jul 17, 2025

Diploma PLC reported a strong Q3 performance, leading to an upgrade in its full-year organic growth forecast from 8% to 10%. The company achieved a year-to-date reported growth of 12%, bolstered by acquisitions despite some foreign exchange impacts. Diploma invested approximately £39 million in two acquisitions: Haagensen A/S, enhancing its Seals capability in Denmark, and Alpha Laboratories, marking its entry into the UK In Vitro Diagnostics market. These strategic moves are expected to strengthen Diploma’s market positioning and operational capabilities.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £42.40 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Regulatory Filings and Compliance
Diploma PLC Announces Change in Voting Rights Structure
Neutral
Jul 2, 2025

Diploma PLC, a UK-based company, has announced a change in its voting rights structure following an acquisition or disposal of voting rights and financial instruments by BlackRock, Inc. As of June 30, 2025, BlackRock’s total voting rights in Diploma PLC have fallen below 5%, marking a decrease from their previous position of just over 5%. This adjustment in voting rights could impact the company’s governance and influence within the industry, potentially affecting stakeholders’ interests.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £40.50 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Business Operations and StrategyRegulatory Filings and Compliance
Diploma PLC Announces Change in Major Holdings by BlackRock
Neutral
Jun 9, 2025

Diploma PLC announced a change in major holdings, with BlackRock, Inc. increasing its voting rights to 5.02% as of June 5, 2025. This acquisition of voting rights and financial instruments signifies a notable shift in stakeholder dynamics, potentially impacting the company’s governance and strategic decisions.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £40.50 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Regulatory Filings and Compliance
Diploma PLC Announces Change in Major Holdings
Neutral
May 28, 2025

Diploma PLC, a UK-based company, has announced a change in its major holdings as BlackRock, Inc., a leading global investment management corporation, has adjusted its financial instruments related to Diploma PLC. The notification indicates that BlackRock’s voting rights in Diploma PLC have fallen below 5%, signaling a potential shift in stakeholder influence and market dynamics for the company.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £40.50 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Regulatory Filings and Compliance
Diploma PLC Director Increases Shareholding
Positive
May 21, 2025

Diploma PLC announced that Katie Bickerstaffe, a Non-Executive Director, has purchased a total of 96 Ordinary Shares in the company over two days, increasing her total shareholding to 1,517 Ordinary Shares. This transaction was made in compliance with the UK Market Abuse Regulation, reflecting ongoing confidence in the company’s market position and potential future performance.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £40.50 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Diploma PLC Reports Strong Half-Year Results and Upgrades Full-Year Guidance
Positive
May 20, 2025

Diploma PLC announced strong half-year results for the period ending March 31, 2025, with a 14% increase in revenue to £728.5 million and a 25% rise in adjusted operating profit to £156.9 million. The company reported robust organic revenue growth of 9%, driven by successful acquisitions and operational leverage, and upgraded its full-year guidance. The diversified portfolio and differentiated business model have positioned Diploma well despite an uncertain environment, with positive momentum expected to continue across all sectors.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £40.50 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Business Operations and StrategyRegulatory Filings and Compliance
Diploma PLC Announces Change in Shareholder Voting Rights
Neutral
May 19, 2025

Diploma PLC has announced a change in its shareholder structure, with Norges Bank crossing a significant threshold in its voting rights. As of May 15, 2025, Norges Bank holds 2.986480% of the voting rights in Diploma PLC, a slight decrease from its previous position. This adjustment in holdings could have implications for the company’s governance and strategic decisions, reflecting a shift in stakeholder influence.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £40.50 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Business Operations and StrategyRegulatory Filings and Compliance
Diploma PLC Announces Change in Major Holdings by The Capital Group
Neutral
May 19, 2025

Diploma PLC has announced a change in its major holdings, with The Capital Group Companies, Inc., a U.S.-based investment management firm, adjusting its voting rights in the company. The Capital Group, through its subsidiaries, now holds 12.955690% of voting rights in Diploma PLC, a slight decrease from the previous 13.002149%. This adjustment reflects the ongoing management of investment portfolios by The Capital Group, which does not hold shares for its own account but manages them for various investment clients. This change in holdings may influence the strategic decisions and market perception of Diploma PLC, impacting its operations and stakeholder interests.

The most recent analyst rating on (GB:DPLM) stock is a Buy with a £40.50 price target. To see the full list of analyst forecasts on Diploma stock, see the GB:DPLM Stock Forecast page.

Business Operations and Strategy
Diploma PLC’s Shareholder Structure Shifts with BlackRock’s Acquisition
Neutral
May 9, 2025

Diploma PLC has announced a significant change in its shareholder structure, with BlackRock, Inc. acquiring a 5% stake in the company. This acquisition marks a notable shift in the company’s ownership dynamics, potentially impacting its strategic direction and market positioning. The increase in BlackRock’s holdings reflects a growing interest in Diploma’s operations, possibly influencing future stakeholder decisions and company policies.

Business Operations and StrategyRegulatory Filings and Compliance
Diploma PLC Sees Increased Stake by Capital Group
Neutral
May 6, 2025

Diploma PLC, a UK-based company, has announced a change in the voting rights held by The Capital Group Companies, Inc. The Capital Group, a major investment management firm based in Los Angeles, has increased its voting rights in Diploma PLC from 12.863009% to 13.002149%, indicating a slight increase in its influence over the company. This adjustment in voting rights reflects The Capital Group’s strategic investment decisions and could impact Diploma’s governance and future strategic directions.

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.Date of analysis: Jul 17, 2025