Broker tips: DCC, FRP Advisory, Begbies Traynor

15th Aug 2024 15:20

(Sharecast News) - RBC Capital Markets upgraded DCC on Thursday to 'outperform' from 'sector perform' and lifted the price target to 5,800.0p from 5,700.0p following recent weakness.

It noted that the shares have been weak year-to-date, underperforming the sector by around 16% despite in-line results and no real new news.

"Whilst we expect trading in Healthcare and especially Technology to remain tough, there is recovery potential over time," RBC said. "Consensus also appears to be factoring in no organic profit growth in Energy for this year, which looks conservative, even factoring in a tough comparative."

It added that M&A potential also provides scope for positive earnings per share momentum.

Analysts at Berenberg took a fresh look at the British insolvency services market on Thursday as it made changes to its target prices on two of the sector's biggest names.

The German bank stated FRP Advisory, the largest UK appointment taker for administrations, offers exposure to what it thinks will play out as accelerated structural growth. Berenberg raised its target price on the 'buy' rated stock from 200.0p to 220.0p.

As far as Begbies Traynor was concerned, the UK's largest appointment taker for liquidations has demonstrated "a strong post-pandemic rebound", now stabilising at elevated levels over the last two-and-a-half years. However, Begbies shares have "materially de-rated" since the turn of the year, currently standing at historically low multiples despite a positive recent trading outlook, indicating growth across all service lines.

"With solid forecast organic EPS growth, alongside M&A optionality required to meet a targeted £200.0m of revenue, we view current pricing as anomalous. We update our price target to 150.0p (from 170.0p) today," said Berenberg.