Panmure Liberum has issued an 'uneasy buy' recommendation on Inchcape PLC (LSE:INCH), the car distributor, after reducing its price target from 1,220 pence to 1,000 pence.
The decision follows a series of challenges affecting Inchcape’s outlook, particularly foreign exchange losses and weakening performance in the Asia-Pacific and Americas regions.
The valuation downgrade highlights the difficulties posed by currency devaluation in Inchcape’s key markets, notably a significant loss from the Ethiopian birr’s devaluation.
Inchcape’s geographic diversity helps shield it from isolated regional downturns, but it also adds complexity to forecasting.
Despite resilience in some European markets, trading in regions such as Hong Kong and Australia remains mixed. Panmure notes that investors may need to exercise patience until forecasts stabilise, although Inchcape’s valuation remains relatively low.
While still recommending a buy, Panmure Liberum advises caution, acknowledging that the outlook is clouded by global macroeconomic headwinds.
In morning trading, the stock was up 3p at 734p.