RBC Capital Markets downgraded sales, marketing and support services group DCC on Monday to ‘sector perform’ from ‘outperform’ and slashed the price target to 5,800p from 7,500p.
“We are big fans of the company and management, and believe there is scope for a re-rating over time if it can skew the business away from traditional energy,” RBC said.
“However, we believe the exposure to a squeezed consumer warrants some forecast caution in the current environment.”
In addition, the bank said it has revisited the balance sheet and taken account of the higher average net debt position versus the year end, and additional balance sheet liabilities in its valuation, while de-ratings of comparators also impact its sum of the parts.
