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Inchcape jumps 5% as French broker Exane BNP Paribas returns rating to 'outperform'

Exane has also increased its target price for the FTSE250-listed group to 1,050p, up from 735p previously, offering 30% upside potential

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In early morning trading, Inchcape shares were 40.5p higher at 845.5p

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.” 

Quick facts: Inchcape

Price: 688.5 GBX

LSE:INCH
Market: LSE
Market Cap: £2.76 billion
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