Bullish comment from French broker Exane BNP Paribas drove a 5% gain in the shares of global motor dealer Inchcape PLC (LON:INCH) this morning.
Exane has upgraded its stance for the FTSE 250-listed group to ‘outperform’ from ‘neutral’, with an increased target price of 1,050p, up from 735p previously, offering 30% upside potential.
In early morning trading, Inchcape shares were 40.5p higher at 845.5p.
In a note to clients, Exane’s analysts said Inchcape’s Ignite strategy is “beginning to bear fruit and underpins double digit EPS growth over the next four years.”
They added: “Growth is moving from new vehicle sales to aftersales, self-help and M&A; broadening the global presence and quality of the business.”
The analysts noted: “The investment case has undergone a sharp U-turn over the past 6 months.
“The macro backdrop has improved and there would now look to be upside risk to the demand environment. Currency has turned from a headwind to tailwind.”
They added: “The relevance of the macro and structurally challenged UK retail sector to Inchcape is diminishing.”