DAVY VIEW

DCC Group has exited its 25th year of trading with double-digit growth across all four divisions and strategically important transactions in DCC LPG, DCC Technology and DCC Retail & Oil (R&O). These bring acquisition spend to c.£370m in the past 12 months. We are upgrading our EPS for 2020 and 2021 to 368p and 376p respectively. Trading on 17.6x FY 2020 P/E, with very material balance sheet capacity, we think current valuations fail to reflect the significant opportunity for growth across all four divisions. Our price target of £88 suggests over 30% upside.