RBC Capital downgrades DiscoverIE, says valuation back in line with history

(Sharecast News) - RBC Capital Markets downgraded DiscoverIE on Friday to 'sector perform' from 'outperform' as it said the valuation is now back in line with history. The bank said DiscoverIE delivered solidly for 2026 against a relatively challenged backdrop.

"Growth is now improving and we forecast +18% EBITA growth in 2027E, though about half of this is acquired such that earnings per share growth is forecast at a less aggressive +8%," it said. "However, the share price has now moved to reflect better growth, up circa 50% since end March."

RBC said it upgraded the stock in April 2025 as it was caught up in the tariff selloff and its price-to-earnings fell to a 30% discount to the 10-year average of 18x.

"With the share recently rallying +50% from its end March 2026 lows, the P/E is now at 18.1x, in line with its 10-year average and also at a slight premium to our UK coverage average of 16.9x," it said, hence the downgrade.

RBC kept its price target on the shares at 800p.

At 0938 BST, the shares were down 2.6% at 754.00p.