Intel stock extends gains after report of possible U.S. government stake
Investing.com -- Shares of Inchcape (OTC:INCPY) (LSE:INCH) rose 3.5% today following the company’s announcement of a new £250 million share buyback program.
The automotive distributor and retailer’s move comes on the heels of a recently completed £150 million return to shareholders, highlighting its robust cash generation capabilities.
Inchcape’s full-year 2024 earnings per share (EPS) are reported to align with the company-compiled consensus. However, its trading commentary suggests that consensus profit before tax (PBT) estimates might decrease by approximately 5% for FY25E due to mixed trading in the Asia-Pacific region continuing into early FY25E.
This potential decline is anticipated to be partially mitigated by lower interest costs. Despite the mixed trading outlook, the company’s buybacks are expected to keep consensus EPS broadly stable.
The company’s profitability is forecasted to be more heavily weighted towards the second half of FY25E, driven by product cycles and the ramp-up of new contracts. Additionally, Inchcape has revised its capital allocation policy to focus more on ongoing share buybacks rather than mergers and acquisitions, which is seen as a strategic move considering the company’s current low valuation multiple.
Jefferies, a brokerage firm, commented on Inchcape’s financial targets and valuation, stating, "We argue that new medium-term annual targets (to 2030) — 3-5% organic growth, c.6% margins, 25-30% ROCE, £2.5bn free cash flow (FY25E-FY30E); 10% compound EPS growth — are yet to be reflected in currently low valuation: FY25E: 8.5x P/E, 4.7x EV/EBITDA, 13.4% FCF yield, 4.5% dividend yield."
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