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Feb 9 2021, 06:30 GMT
DCC is a unique asset, a true ‘compounder’, with an almost three- decade track record of resilient and growing cash flow. As we outline in this report, we believe all the principal factors that have driven this historically (sustainable organic growth, M&A, high and stable ROCE, excellent cash conversion) remain intact. Yet the stock has de-rated to a valuation that is typical of a low-quality cyclical. Against this backdrop, we think risk/reward is now so positively skewed that our £88 price target suggests >50% upside.