(Sharecast News) - Inchcape powered higher on Wednesday as Barclays upped the car dealership to 'overweight' from 'underweight', keeping the price target at 700p.
The bank noted that it initiated coverage of the stock at UW based on its view it was at the top of the cycle in all of its markets and that FX had been a major tailwind over 2013-2017.
"This was the cycle until July 2018.
During the bearish cycle, investors tend to group Inchcape with cyclical and low-multiple auto original equipment manufacturers.
This is the part of the cycle we are in now," Barclays said. "Even at our below-consensus and highly conservative numbers, we expect Inchcape to generate 14% return on invested capital and 17% return on equity, arguing for 1.7x price-to-book value (versus 1.3x currently)." The bank said Inchcape should launch a share buyback worth £200m a year. At 1545 GMT, the shares were up 7.8% to 549.50p.
Investors should be aware that past performance is not a reliable indicator of future results and that the price of shares and other investments, may fall as well as rise and the amount realised may be less than the original sum invested.
Walker Crips Group plc (Old Change House, 128 Queen Victoria Street, London EC4V 4BJ), registered in England, registered number 1432059, incorporates the following companies which are authorised and regulated by the Financial Conduct Authority: Walker Crips Investment Management Limited registered in England number 4774117 member of the London Stock Exchange, Walker Crips Wealth Management Limited registered in England number 3790291, Ebor Trustees Limited registered in England number 3514268, Barker Poland Asset Management LLP registered in England and Wales number OC341149.