DCC Shares Drop To Multi Year Low as Morgan Stanley Downgrades

DCC Plc shares (LON:DCC) are under pressure today, trading 3.8% lower at 4,256p early with a downgrade from Morgan Stanley doing little for bulls. The shares faced selling pressure, making multi year lows following the analyst's adjustment to their rating, impacting market sentiment.

The Dublin-based sales, marketing, and support services group saw its shares drop to new 52 week lows as Morgan Stanley analyst Annelies Vermeulen downgraded DCC from ‘Overweight' to ‘Equal Weight,' also lowering the price target from 6,150 GBp to 5,750 GBp. The revised rating reflects caution regarding the European business services sector, specifically staffing and chemical distribution, as part of Morgan Stanley's broader 2026 outlook. This adjustment contributed to DCC reaching a new 52-week low, trading as low as GBX 4,446 earlier in the week, and pushing the share price below its 200-day moving average, a technical indicator often watched for bearish signals.

The downgrade follows DCC's recent financial disclosures and strategic decisions. In November 2025, the company reported first-half fiscal 2026 results, revealing an adjusted operating profit of £207 million, a 5.4% decrease year-over-year. Revenue for the period was £7.38 billion, down 7.1% from the previous year. Despite these declines, the company maintained its full-year guidance and increased its interim dividend by 5% to 69.5 pence. The first quarter saw negative operating profit, but trading improved in the second quarter, resulting in modest growth.

Adding to the complex picture, DCC completed a £600 million tender offer buyback in December 2025, reducing its share count by 12%. This move, resulting in 85,423,097 ordinary shares with voting rights, aimed to return surplus cash to shareholders while maintaining a strong balance sheet. Prior to this, in April 2025, the sale of DCC's healthcare division to HealthCo Investment Limited for £1,050 million also impacted the stock's performance. This valuation fell short of the £1,300 million anticipated by analysts, leading to a 3.7% drop in the company's share price. The healthcare division contributed 13% to the group’s EBITA, and the sale aligns with a strategic focus on the Energy sector.

Morgan Stanley's shift to ‘Equal Weight' highlights concerns about specific segments within DCC's operations, while other analysts maintain a positive outlook based on the company's strategic initiatives and potential for future growth. The market will be closely watching DCC's performance in the coming quarters to assess whether these positive forecasts will materialise. For now however, it appears that the bears are in charge, with the share price 15% lower over the past month of trading.