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RBC upgrades DCC stock to Outperform on recovery potential and conservative estimates

EditorEmilio Ghigini
Published 15-08-2024, 02:02 pm
DCC
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On Thursday, RBC Capital revised its rating for DCC Plc. (DCC:LN) (OTC: DCCPF), lifting the stock from Sector Perform to Outperform and raising the price target to GBP58.00 from GBP57.00. The adjustment reflects the brokerage firm's outlook on the company's stock, which has observed a notable underperformance year-to-date compared to its sector.

DCC's stock has lagged behind its industry peers by approximately 16%, despite the company reporting results that met expectations and no significant new developments. RBC Capital's analysis indicates that while DCC's Healthcare and Technology segments may continue to face challenges, there is potential for recovery over time.

In addition, RBC Capital suggests that the current market consensus, which does not anticipate organic profit growth in DCC's Energy division for this year, may be overly cautious. This assessment takes into account the difficult comparatives from the previous year.

The firm also notes that potential mergers and acquisitions could offer opportunities for positive earnings per share (EPS) momentum. This aspect, combined with the potential for recovery and the conservative outlook on organic growth, has led RBC Capital to adopt a more optimistic stance on DCC's shares.

The revised price target of GBP58.00, a slight increase from the previous GBP57.00, is an indication of RBC Capital's confidence in the stock's prospects. The updated target suggests a modest but positive adjustment in the firm's expectations for the stock's performance.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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