Deutsche Bank has lowered its rating on Inchcape PLC (LSE:INCH) from 'buy' to 'hold' and cut its price target from 1000p to 800p, citing a sluggish start to the year for the car dealer and macroeconomic uncertainty across key markets.
In a note to clients, analyst David Brockton said first-quarter revenue fell 8% on a reported basis and 5% organically, a steeper decline than the 1% dip seen in the final quarter of 2024.
Sales totalled £2.1 billion, representing just 22% of Deutsche’s full-year forecast, down from 25% at the same stage last year.
While management had already signalled that growth in 2025 would be weighted towards the second half, the slower start has clouded the near-term outlook.
Asia-Pacific remains challenging, with lingering weakness in Hong Kong, while Europe and Africa were hit by tough comparatives. The Americas, by contrast, saw further improvement.
Encouragingly, Inchcape signed seven new distribution agreements in Q1, which should support second-half momentum. The company also believes it slightly outperformed the broader market, with volumes down 3% versus a 4% drop in industry-wide figures.
Still, with tough comparatives and uneven regional trends, Deutsche says it is pausing for now, awaiting clearer signs of acceleration.
The broker maintains a positive long-term view but sees limited near-term upside at current levels.
The shares were up 2.1% at 659p in late morning trade.