Barclays downgrades DCC to 'equalweight'
Barclays downgraded its stance on shares of sales, marketing and support services company DCC to ‘equalweight’ from ‘overweight’ on Friday, slashing the price target to 6,900p from 8,100p as it said it was "struggling for upside".
The bank said M&A activity has been more subdued than it expected since the 2018 equity placing, while organic growth in recent years appears to be tracking below management's long-term guidance that around a third of profit growth is organic.
"With return on invested capital gently declining in the last few years, question marks about the future growth prospects for some divisions and a relatively unattractive ESG profile compared with other stocks in the sector, we struggle to see significant upside," Barclays said.
At 1355 BST, the shares were down 3% at 6,560p.