Diploma (LON:DPLM) Announces Quarterly Earnings Results

Diploma (LON:DPLM) posted its quarterly earnings data on Tuesday. The company reported GBX 74.70 earnings per share (EPS) for the quarter, Digital Look Earnings reports. The company had revenue of £851.10 million for the quarter. Diploma had a net margin of 8.99% and a return on equity of 14.17%.

Here are the key takeaways from Diploma’s conference call:

• H1 results were very strong, with organic growth of 15%, total revenue up 17%, operating margin expanding 300 bps to 24.5%, and EPS rising 36%. Return on capital also improved to 22.7%, underscoring continued compounding performance.
• The company raised full-year guidance again, now expecting 12% organic growth and 6% contribution from acquisitions, up from 9% and 3% previously. Management said it still expects operating margin to hold at 25% for the year.
• Controls was the standout division, delivering 26% organic growth, led by strong performances from Clarendon, IS-Group, Windy City Wire, and Peerless. Management said growth is broad-based and should remain strong, even if comparisons get tougher in H2.
• Acquisition activity accelerated, with 15 deals completed over the last 12 months and GBP 310 million deployed in total. Management emphasized that deal flow remains strong, but some acquisitions may be slightly dilutive to group margins in the near term.
• Seals and Life Sciences remain mixed: North American Seals performed well, while International Seals showed improvement late in Q2 but remains challenged; Life Sciences posted 4% organic growth and management expects broadly mid-single-digit growth for the full year.

Diploma Stock Down 0.8%

LON DPLM opened at GBX 6,780 on Wednesday. Diploma has a 1-year low of GBX 4,558 and a 1-year high of GBX 7,295. The company has a market capitalization of £9.09 billion, a price-to-earnings ratio of 49.38, a PEG ratio of 2.82 and a beta of 0.92. The stock’s 50 day moving average is GBX 6,334.43 and its two-hundred day moving average is GBX 5,757.99. The company has a current ratio of 2.04, a quick ratio of 0.80 and a debt-to-equity ratio of 46.97.

Wall Street Analyst Weigh In

A number of equities research analysts recently weighed in on DPLM shares. Stifel Nicolaus lifted their target price on Diploma from GBX 6,200 to GBX 6,800 and gave the stock a “buy” rating in a research report on Thursday, March 19th. Jefferies Financial Group raised their price objective on Diploma from GBX 5,200 to GBX 5,700 and gave the stock a “hold” rating in a research report on Monday, March 23rd. Berenberg Bank lifted their price objective on Diploma from GBX 7,500 to GBX 9,000 and gave the stock a “buy” rating in a report on Tuesday. Deutsche Bank Aktiengesellschaft upped their target price on Diploma from GBX 6,200 to GBX 6,400 and gave the company a “buy” rating in a research note on Thursday, March 19th. Finally, JPMorgan Chase & Co. raised their target price on Diploma from GBX 5,120 to GBX 5,760 and gave the stock a “neutral” rating in a research report on Friday, March 27th. Five research analysts have rated the stock with a Buy rating and three have given a Hold rating to the company’s stock. Based on data from MarketBeat, the stock has a consensus rating of “Moderate Buy” and a consensus target price of GBX 6,438.75.

Insider Activity

In related news, insider Ian El-Mokadem bought 500 shares of the business’s stock in a transaction that occurred on Friday, March 20th. The stock was acquired at an average price of GBX 5,820 per share, for a total transaction of £29,100. Insiders own 1.14% of the company’s stock.

Diploma Company Profile

Diploma PLC, together with its subsidiaries, supplies specialized technical products and services in the United Kingdom, Continental Europe, North America, and internationally. It operates through three business sectors: Life Sciences, Seals, and Controls. The Life Sciences sector supplies technology-enabled products used in surgical procedures in operating theatres and endoscopy; testing equipment and services for clinical laboratories; and bio-pharma, food safety and testing, and other research-oriented products.