DAVY VIEW

DCC has delivered a H1 2021 performance that would be robust in a ‘normal’ year, but we think it is astonishingly strong given the backdrop through the half. Organic profit growth was over 4%, supporting constant FX growth of 8.6%. This reinforces both the resilience and agility of DCC’s business model. Furthermore, the balance sheet is in excellent shape and the group remains ‘very active’ from an M&A perspective. We expect to upgrade our FY 2021 EPS by 8% to 350p and FY 2022 EPS by 4% to 370p, putting the stock on just 15.1x 2022 EPS. We reiterate our ‘Outperform’ rating and £88 price target — almost 60% upside from current levels.