Davy Morning Equity Briefing
Aug 28, 2025
Diploma plc
Upgrading forecasts and price target but moving to ‘Neutral’
Diploma’s operating performance continues to be excellent with strong top-line growth driving margin expansion. We upgrade our forecasts and now assume 19% EPS growth in FY2025. We increase our price target to £55 but lower our rating to ‘Neutral’ following the strong expansion in valuation multiples.
Irish Continental Grp
Strong H1 and well positioned for the year
Irish Continental Group (ICG) delivered a strong H1 with EBITDA growth of 10.5% to €54.9m (ahead of our forecast of €52m). The summer looks strong, particularly on the freight side. With the weighting of the business to freight (c.70%) and completion of repairs at Holyhead by the port owner requiring further operational restrictions during September/October, there is still volatility on full year forecasts. However, we are likely to push up our forecast 2025 EBITDA from €142.5m to c.€145m. Year-end net debt will likely be >€190m following buybacks, purchase of the ‘James Joyce’ and a container vessel and extension of the Belfast Container Terminal concession for a further six years to 2032. However, fleet ownership and investment are at a level where we expect substantial free cash flow in the years to come.
