Broker tips: Diploma, Wickes

(Sharecast News) - Analysts at Berenberg hiked their target price on technical products and services firm Diploma from 6,600p to 7,500p on Thursday following the firm's unscheduled trading update a day earlier. Berenberg said Diploma's update pointed to "strong trading in the year to date", with the firm also upgrading FY26 adjusted underlying earnings guidance by 13% versus prevailing consensus expectations of £337m. Full year rganic revenue growth was now expected to be 9%, up from 6%), while adjusted EBIT margins were seen expanding from 22.5% to 25% and adjusted earnings per share growth was pegged to be more than 20% year-on-year.

The German bank stated Diploma's performance had been driven by "strong growth" across its diversified portfolio. In part, it said this growth was due to Diploma's Peerless business delivering "outstanding" organic growth in the year to date.

Berenberg also noted that organic growth for the rest of Diploma's portfolio was said to be "strong and ahead of the group's financial model" for growth of more than 5%.

"We upgrade our EPS forecasts by double-digit percentages across our three-year forecast period and move our price target to 7,500p (from 6,600p). While shares performed strongly on 18 March (+18%), we still see significant attraction in a 26x FY27 P/E, in the context of the group's bestin-class sustainable quality compounding model," added Berenberg.

Canaccord Genuity bumped up its target price on home improvement retailer Wickes from 250p to 265p on Thursday after the firm delivered "a strong FY25" performance.

The Canadian bank said Wickes' solid FY results were driven by volume growth, market share gains and disciplined execution, with improved profitability and a "robust" balance sheet supporting investment and shareholder returns.

Operationally, Canaccord Genuity noted that Wickes had made further progress, expanding and upgrading its store estate, "improving service propositions and enhancing digital capabilities", with its TradePro offering continuing to grow and underpin volumes.

Canaccord also pointed out that Wickes' management has increased its long-term ambition to around 300 stores from the previous 250 target, building on the "proven performance" of both existing and newer formats.

"Trading at the start of FY26 has been resilient, management remains comfortable with current market expectations for the year ahead and we leave our headline FY26 PBT forecast unchanged at £57.0m (+14% y/y)," added Canaccord.









Reporting by Iain Gilbert at Sharecast.com