Diploma PLC: Off the Call

Research evidence excerpt

Diploma PLC: Off the Call

Update

July 16, 2026 08:02 AM GMT

Morgan Stanley & Co. International plc+MDiploma PLC | Europe Annelies Vermeulen

Equity Analyst

Off the Call Annelies.Vermeulen@morganstanley.comZachariah Al-Qaryooti +44 20 7425-4367

Zach.Al-Qaryooti@morganstanley.com +44 20 7425-2400

Key Takeaways Remi Grenu

Shares are +5% this morning, reflecting the underlying upgrade and taking YTD Remi.Grenu@morganstanley.com +44 20 7425-0552

share performance to +35%.

Diploma PLC (DPLM.L, DPLM LN)

Investor feedback positive; while many expected an upgrade, the magnitude is Business Services | United Kingdom

stronger than expected and means FY27 looks well underpinned ... Stock Rating Overweight

Industry View Attractive

… showing a clear ability to deliver resilient, broad-based, best-in-class organic Price target 8,250p

Shr price, close (Jul 15, 2026) 6,770p

growth, robust margins and compounding earnings. Organic ex Peerless of ~10%. 52-Week Range 7,300-4,894p

Mkt cap, curr (mn) £9,116

Focus of the Q&A was on guidance/outlook, Peerless, Defense markets, margins Net debt (09/26e) (mn)* £463

and leadership. Key highlights below. EV, curr (mn)* £9,504

Stay Overweight. Significant runway ahead to deliver sustainable compounding * = GAAP or approximated based on GAAP

growth in structurally growing end markets, at an attractive returns profile.

Guidance upgrade. FY26 has been materially stronger than initially expected.

Management adopted a conservative stance earlier in the year given the

macroeconomic and geopolitical backdrop, which has ultimately resulted in multiple

upgrades as trading has well exceeded those assumptions. Regarding FY27,

management stressed that FY26 is not a normal year and does not expect to repeat

+40% EPS growth and +15% organic growth in FY27.