LONDON (ShareCast) - (Sharecast News) - Analysts at Berenberg slightly raised their target price on technical products and services supplier Diploma from 3,150.0p to 3,200.0p on Thursday, stating the group had made a "strong start" the year following a record performance in 2021.
After Diploma's record full-year, in which revenues grew by 46% year-on-year, margins improved 2,700 basis points to 18.9% and free cash flow conversion hit 103%, Berenberg pointed out that 2022 had also started strongly for the company.

Berenberg said Diploma achieved first-quarter underlying revenue growth of 16% year-on-year, with operating margin guidance of 18-19% maintained, despite increasing inflationary pressures.

The German bank also highlighted that while Diploma has guided to first-half weighted growth for 2022, its analysts expect the demand outlook to remain "bright throughout the year", supported by continued strength in Windy City Wire.

"We continue to view Diploma as a key 'buy' idea in the UK industrials sector, with the shares down by 22% from highs, trading on 29x FY 2023 earnings," concluded Berenberg.

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