Deutsche Bank raises DiscoverIE stock price target amid profit growth

Published 05/06/2025, 10:50
Deutsche Bank raises DiscoverIE stock price target amid profit growth

On Thursday, Deutsche Bank (ETR:DBKGn) analysts increased the price target for DiscoverIE Group Plc (DSCV:LN) to £7.35 from £6.00, while maintaining a Hold rating. The decision reflects the company’s recent financial performance and strategic outlook.

DiscoverIE reported revenue of £422.9 million, a 3% decrease at constant FX, with an organic decline of 7%. Despite this, the company achieved an EBIT of £60.5 million, surpassing Deutsche Bank’s estimate of £59.9 million and marking an 8% increase at constant FX. The EBIT margin improved to 14.3%, a 120 basis point rise year-on-year.

Profit before tax reached £50.1 million, a 4% increase, while earnings per share climbed to 38.7p, exceeding the expected 37.8p. The dividend per share also saw a 4% increase, reaching 12.5p. Revenue was impacted by an industry-wide inventory correction, but recent order trends have been positive, with a 15% organic increase in order intake during the fourth quarter of 2025.

The first quarter of 2026 has shown further progress, aligning with management expectations and maintaining a typical seasonal split between the first and second halves of the year. Profit growth was driven by a 240 basis point increase in gross margin, reflecting acquisition benefits and DiscoverIE’s variable cost manufacturing model, alongside efficiency gains from clustering past acquisitions. Management expressed confidence in achieving a 15% EBIT margin target by fiscal year 2028, with an increased target of 17% by fiscal year 2030.

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