Diploma (AO) | Buy | Q3 update: another strong beat and FY guidance increase (again)

研报英文原文证据摘录

Diploma (AO) | Buy | Q3 update: another strong beat and FY guidance increase (again)

News comment

Release date: 16 July 2026

Emanuele Sartori

Equity Research Analyst

+ 44 207 621 5267

esartori@keplercheuvreux.com

BuyDiploma

United Kingdom | Capital goods Beta Profile: MCap: GBP9.1bn

Target Price: 7,850.00p Bloomberg: DPLM LN Reuters: DPLM.L

Current Price: 6,770.00p Free float 99%

Up/downside: 16.0% Avg. daily volume (GBPm) 3,636.5

YTD abs performance 27.9% Market data: 15 July 2026

52-week high/low (GBP) 7225.00/4904.00

Q3 update: another strong beat and FY guidance increase (again)

Key points:

This is a clean positive update: growth upgraded, margins upgraded, consensus upgraded, Controls still firing, Seals improving

and M&A momentum intact. The stock has performed, but this update further reinforces the Buy case because Diploma is now

showing not just exceptional growth, but exceptional quality of growth.

Diploma delivered 15% organic growth in the nine months to June, with management calling out a very strong Q3 and continued

momentum from H1. Most importantly, FY 2026 guidance has been upgraded again: organic growth now 14%, up from 12%,

operating margin now c.26.5%, up from c.25%, and adjusted operating profit growth now c.42%, representing a further c.7%

upgrade to consensus. We see this as clearly positive and enough to positively react in the market, after a short sell-off in the

recent period. Management call at 8:00am GMT, dial-in +44 (0) 33 0551 0200, password Diploma Q3.

The quality of the upgrade matters. This is not just a top-line upgrade; the margin guide moving up by 150bps is the key positive.

It confirms very strong drop-through from the value-add model and suggests that the margin uplift is more structural than