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Feb 4 2020, 07:10 GMT
DCC has delivered a robust Q3 against the backdrop of a weak UK consumer and warmer weather. We are making no changes to our EPS forecasts, evidence in our view of the group’s excellent operational management and the (increasing) resilience of the business model. We believe current valuations present investors with a compelling opportunity. At 12.2x 2021 EV/EBITA, we see very limited downside to the share. If DCC continues its 26-year track record of capital deployment, EPS accretion could be very material indeed. In fact, while our formal price target is £88, we can feasibly see a scenario where DCC trades at c.£100 a share in the next 2-3 years — 60% above current levels.