RBC Capital upgrades DiscoverIE, says risks priced in.
RBC Capital Markets upgraded DiscoverIE Group on Tuesday to 'outperform' from 'sector perform' as it argued that risks appear to be more than priced in.
Discoverie Group
15 April 2025 11:17:16
Source: Sharecast
It said the company is exposed to US tariff and short-cycle demand risks.
"However, with it trading at an approximately 30% discount to its long-term price-to-earnings average and more in line with its UK peers (having underperformed by 12% over the last 3 months), we see this as more than priced in," RBC said.
"And we still expect DiscoverIE to outgrow these peers organically in the medium term, with incremental M&A accretion potential."
RBC cut the price target to 600p from 690p. It said the PT is based conservatively on a target price-to-earnings of 15x 26E, still a 20% discount to the 10-year average P/E.
"This represents a slight premium to our UK coverage," RBC said.
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