DIPLOMA (+) : 1H26 - After the call

研报英文原文证据摘录

DIPLOMA (+) : 1H26 - After the call

EQUITIES

BUSINESS SERVICES

DIPLOMA OUTPERFORMPRICE* GBP66.3  TARGET PRICE GBP81 (UPSIDE 22%)

FLASH NOTE

1H26 - After the call

19 MAY 2026 Securities Research Report Production time: 11:01* (London time)

Research Analyst & Publishing Entities

Daniel Cowan BNP Paribas London Branch (+44) 7584 606 158 daniel.cowan@uk.bnpparibas.com

BNPP View:

A characteristically confident tone from management reflecting another emphatic beat-and-raise. The commentary

around an unchanged aerospace aftermarket against an uncertain macro is supportive in the short term, while the

prospects of cross-selling between the US and European fastener markets gives confidence in longer-term growth.

Breadth of organic growth within Controls and across the wider group (HSD ex Peerless) should provide further

reassurance. Investing in price (Peerless spot business), inventory and resources is just what the group should be

doing to sustain organic growth and cement its status as compounder. Management’s repeated message that organic

growth, margin and ROCE will moderate from current highs now lands in the context of continued strategic delivery,

robust operating leverage, self-funded M&A and structural end-market tailwinds.

In our recent initiation (DIPLOMA: Riding the cable car, 27April) we identified further accretive M&A and higher-for-

longer US aerospace aftermarket growth as key catalysts and drivers of our investment case. We continue to argue it

is time for Diploma to be admitted for good to the ranks of the premium-rated European compounders.

What happened?

Diploma’s 1H26 results call – some highlights:

US aerospace aftermarket: Nothing has changed - newbuild pipeline is significant and fosters healthy aftermarket, no

change to competition.