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Investing.com - UBS initiated coverage on Inchcape Plc. (LON:INCH) with a Buy rating and a price target of GBP9.20, highlighting significant upside potential for the automotive distributor.
The investment bank believes Inchcape offers a strong value proposition for automotive OEMs, supported by a diversified country and brand portfolio that provides resilience during challenging market conditions.
UBS analysis shows Inchcape’s volumes have consistently outperformed end-markets over the long term and appear positioned to deliver the required second-half 2025 reacceleration in the near term.
Despite challenging automotive markets, UBS expects Inchcape to achieve steady market-share gains, maintain stable margins, and deliver strong cash conversion, resulting in a forecasted 5% profit CAGR for fiscal years 2025-2029 and a sustainable approximately 10% annual cash return.
The firm noted that 12 months of de-rating has left Inchcape trading at less than 8x price-to-earnings ratio, which prices in ongoing earnings declines, while UBS’s GBP9.20 price target indicates approximately 40% upside potential.
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