Citi analysts have reiterated their buy rating on FTSE 250-listed car dealership Inchcape PLC (LSE:INCH) shares in a brief broker note.
“We believe Inchcape has a unique consolidation opportunity within the automotive distribution market,” said Citi, noting that the company secured 15 new contracts and three M&A transactions in 2023.
Analysts noted that 2023 volumes were subdued in numerous key markets, including Chile, Colombia, Singapore, and to a lesser extent Belgium and Greece, but “this suggests scope for a rebound over the next couple of years”.
“Today, we show that in key markets, including Chile and Singapore, volume trends turned positive in April, while FX continues to improve,” added analysts.
Inchcape is shifting towards a pure-play distribution-focused model following the divestment of its UK retail operations in April.
Citi’s full-year adjusted profit-before-tax estimate remains at £610 million, 7% above consensus.
Inchcape shares bounced 2.75% higher on Tuesday.