Citi opens 'positive catalyst watch' on Inchcape

14th May 2024 07:44

(Sharecast News) - Citi opened a 'positive catalyst watch' on shares of Inchcape on Tuesday, as it said the car dealership "has a unique consolidation opportunity within the automotive distribution market".

"In 2023, Inchcape secured 15 new contracts and 3 M&A transactions, which supports this view," the bank said.

In Citi's 22 March report, it argued that in 2023 volumes were subdued in a number of key markets, including Chile, Colombia, Singapore, and to a lesser extent Belgium and Greece.

"This suggests scope for a rebound over the next couple of years," Citi said.

"Today, we show that in key markets, including Chile and Singapore, volume trends turned positive in April, while FX continues to improve."

The bank's FY25 adjusted pre-tax profit estimate of £610m remains around 7% above consensus.

"At the same time, we expect the 'In the Driving Seat' episode on 23 May to be a positive event," Citi added.

Citi rates Inchcape at 'buy'.

At 1050 BST, the shares were up 2.3% at 800.5p.