Berenberg hikes target price on DCC
Analysts at Berenberg hiked their target price on sales and marketing group DCC from 6,500.0p to 7,450.0p on Friday, stating there was value in the group's "war chest balance sheet".
Berenberg said DCC's 2020 full-year results served as a reminder of "the steady reliable compounding that the company has delivered over the years" and that has seen shareholders "handsomely rewarded".
"We think this steady delivery will continue despite the Covid-19 pandemic," noted the analysts.
"This should be ensured by a combination of the essential nature of the majority of DCC's products, tight unit margin management by an experienced management team and a strong seasonal weighting of DCC’s financials to the latter half of its financial year."
The German bank, which also reiterated its 'buy' rating on the firm, said it continues to believe a balance sheet with minimal financial net debt and gross cash of £1.7bn leaves DCC with "plenty of scope" to create shareholder value over the medium-term.
"We raise our estimates by 9-10% following a better-than-expected set of FY 2020 numbers (which saw DCC beat our adjusted PBT by c5%) and encouraging commentary regarding the April and early May run-rates."