UBS starts coverage of Inchcape at 'buy'
UBS initiated coverage of Inchcape Plc on Thursday with a 'buy' rating and 920p price target, saying it sees 40% upside potential.
The bank said car dealership Inchcape has a strong, intact, value proposition for automotive OEMs, with a diversified country and brand portfolio that offers "resilience in challenging conditions".
UBS said its unique new dataset shows that volumes have steadily outperformed end-markets over the long term, and in the short term look on track to deliver a required reacceleration in the second half of 2025.
"Despite challenging auto markets, we expect Inchcape to achieve steady market-share gains, stable margins and strong cash conversion - which results in a forecast +5% FY'25-29 estimated profit compound annual growth rate and a sustainable circa 10% cash return per annum," UBS said.
"However, 12 months of de-rating has left Inchcape on less than 8x price-to-earnings, pricing in ongoing earnings declines."
At 1240 BST, the shares were up 4.2% at 690.50p.
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.
