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DCC upped to outperform as RBC spies significant upside from M&A

The Canadian bank also said concerns around the impact of electric vehicles on the firm as well as lacklustre acquisition activity were "overdone"

DCC PLC - DCC upped to outperform as RBC spies significant upside from M&A

DCC PLC (LON:DCC) has been upgraded to ‘outperform’ from ‘sector perform’ by analysts at RBC, who said concerns around the fuels distributor were “overdone” and they saw “significant upside potential” from merger & acquisitions (M&A) activity.

In a note on Wednesday, the Canadian bank also retained its 7,400p price target on the FTSE 100 firm, saying it had been “hit hard” by a number of concerns around the impact of electric vehicles (EVs), a falling return on capital employed (ROCE) and “lacklustre M&A spend”, however, these were overblown.

READ: DCC expands with pair of bolt-on acquisitions

“Retail & Oil is now in the share price for nothing, we see significant upside potential from M&A, whilst ROCE remains high and we expect to rebound”, RBC said, upgrading the stock following price weakness and saying the valuation was now “very attractive versus peers”.

DCC shares were mostly flat at 5,128p in mid-morning trading.

Quick facts: DCC PLC

Price: 5704 GBX

LSE:DCC
Market: LSE
Market Cap: £5.62 billion
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