DCC PLC (LON:DCC) drifted lower on Monday after analysts at RBC Capital downgraded their rating for the Ireland-based distribution giant to ‘sector perform’ from ‘outperform’ following a recent trading update as it thinks the stock is “up with events”.
The Canadian bank raised its target price for the FTSE 100-listed firm to 7,400p from 6,000p, with the shares currently changing hands at 6,960p, down 1.8% on Friday’s close.
READ: DCC says first quarter trading ahead of expectations despite hit from pandemic
In a note to clients, RBC’s analysts said: “We continue to be fans of the stock, especially the strong operational management and returns focus, but we now see upside as more limited, with the stock trading in line with other quality distributors and seemingly factoring in acquisition spend of c.£300m pa.”
They concluded: “We downgrade to Sector Perform with a new target of 7,400p and would wait for a better entry point.”