Citi bullish on Inchcape ahead of FY results

Citi has reiterated its 'buy' rating for Inchcape ahead of the automotive distributor's full-year results on 4 March, saying little upside is currently priced into the stock despite its strong growth prospects.

Inchcape
14 February 2025 10:03:33

Source: Sharecast

"We believe that Inchcape has a unique opportunity to consolidate the automotive distribution market," said analyst Arthur Truslove.

Citi currently stands 6% above company-compiled consensus on an adjusted pre-tax profit level for 2025, predicting a figure of £525m, up from an estimated £446m in 2024 according to market forecasts.

Truslove highlighted that the stock trades at an enterprise value-to-EBIT ratio of just 5.7, on consensus forecasts – "only just above the minimum seen since the start of 2013 of 5.5x and vs an average of 8.4x over the same period".

"In our view, this does not fully reflect the quality of the business, and we believe that management has an opportunity at FY24 on 4 March to provide significant additional information and comfort," the analyst said.

Shares were 1.3% higher at 664p by 0959 GMT.

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