DCC PLC (LSE:DCC) moved to the top of the FTSE 100 after broker Jefferies said that splitting off its energy arm might generate 40% upside.
After talking to management “We are increasingly confident that the move to simplify the group will unlock embedded value,” said the US bank.
“We believe that the misunderstood and underappreciated Energy division now commands attention
“Health and Tech added two layers of complexity to DCC, and, more recently, have been a drag on growth & returns.
Moving forward, DCC will be a pure-play Energy distribution business that we believe will deliver mid-single-digit organic underlying profit [EBITA] growth.
Jefferies has a ‘buy’ recommendation and a 7,950p target, up 350p, against 5,685p.