Recent gains in Diploma PLC (LON: LON:DPLM) are likely a part of a bigger move up over the next twelve months, as per a Berenberg analyst.
Diploma stock could climb to £44
James Bayliss reiterated his “buy” rating on the supplier of specialized technical products and services this week and raised his price objective to £44.
That suggests a whopping 25% upside from here.
$DPLM has recently topped its 50-day as well as 200-day simple moving average which also indicates bullish momentum moving forward.
On top of it, Diploma stock currently pays a dividend yield of 1.59% which makes up for another good reason to have it in your investment portfolio.
Diploma is buying Peerless Aerospace
James Bayliss is constructive on $DPLM also because it announced plans of buying Peerless Aerospace Fastener (U.S. based) for £236 million this week.
There is “a lot to like” about that “exceptional piece of dealmaking by management”, the Berenberg analyst told clients in his research note.
The acquisition, he’s convinced, addresses concerns related to “sustainability of margins and whether mid-single-digit organic growth is sustainable” for the $4.77 billion company based out of London, United Kingdom.
Note that Berenberg is not the only investment firm that has recently issued a bullish note in favour of Diploma stock. Analysts at Shore Capital also maintained their “buy” rating on it in note last week.