Citi cuts Inchcape stock price target to GBP 11.13, keeps buy rating

Published 21/02/2025, 09:12
Citi cuts Inchcape stock price target to GBP 11.13, keeps buy rating

On Friday, Citi analyst Arthur Truslove adjusted the price target for Inchcape (OTC:INCPY) Plc (INCH:LN) to GBP 11.13, a slight decrease from the previous GBP 11.21, while maintaining a Buy rating on the stock. Truslove highlighted the company’s trading on a 12-month forward consensus P/E of 8x, which is below its average of approximately 12x since 2013. Despite the lowered price target, the analyst’s outlook for the company remains positive.

Truslove based his analysis on investor feedback and market expectations, noting that a significant downgrade to the company-compiled consensus adjusted profit before tax (PBT) of £490 million appears to be already factored into the stock price. He also pointed out that, according to his analysis, volumes in South America are expected to rebound in 2025, aligning with a previous report from January 6.

The Citi analyst revised his 2025 adjusted PBT forecast for Inchcape downward to £509 million from £525 million, citing lower adjusted EBIT forecasts across all divisions. Additionally, Truslove’s review of the interest line suggests that the consensus net interest estimate of £126 million is overly pessimistic. He models a net interest of £117 million, which could provide a tailwind of roughly 2% to the adjusted PBT.

Truslove’s adjusted PBT prediction of £509 million for 2025 stands 4% above the consensus, indicating a more optimistic view of Inchcape’s financial performance than the market average. Despite the reduced price target, the analyst’s continued Buy rating reflects confidence in the company’s potential for future growth and profitability.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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