DAVY VIEW

Electrocomponents (ECM) has demonstrated significant operational improvements over recent years and proved resilient through the most severe parts of lockdown. That said, the stock now trades at an all-time high, finally breaching its September 2000 ‘Tech-boom’ high in November 2020. Economic recovery, two new distribution centres (DCs) and a potential boom in the ‘smart’ sectors will drive strong growth, but the shares may be due a breather following their explosion over recent months. We initiate coverage with an ‘Underperform’ rating.