Diploma stock forecast
Diploma's weighted forecast is 8,981.36 GBp in October 2027. Diploma's outcome hinges on delivery against guidance and cash conversion.
Where could Diploma's shares go?
The weighted forecast is 8,981.36 GBp in October 2027, a 15% return. Bear probability is 25%; base is 55%. Bull probability is 20%. October 2029 outcomes range from 6,764.09 GBp in the bear case to 16,472.34 GBp in the bull case.
| Case | Probability | October 2027 | October 2028 | October 2029 |
|---|---|---|---|---|
| Bear | 25 % | 6693.49 (-14 %) | 6719.17 (-13 %) | 6764.09 (-12 %) |
| Base | 55 % | 9396.92 (+20 %) | 10397.47 (+34 %) | 11355.12 (+47 %) |
| Bull | 20 % | 10698.43 (+36 %) | 13402.67 (+72 %) | 16472.34 (+112 %) |
| Weighted | 100 % | 8981.36 (+15 %) | 10078.94 (+29 %) | 11230.81 (+45 %) |
What this means. The weighted row is the probability-based average of the bear, base, and bull cases, not a separate prediction.
What has to go right for Diploma, and what could go wrong?
The bear case assumes FY26 delivers, but 15% organic growth then proves unsustainable. Aerospace and industrial demand weaken, Controls and Seals slow, and Life Sciences cannot fully offset them. Inventory absorbs cash, write-downs rise and doubts about acquisitions compress the multiple.
The base case becomes more credible if organic growth settles toward the 5% medium-term model and margins move toward 20%. The bull case requires growth to remain above that model, strong margins to persist and acquired businesses to earn attractive returns.
How much cash does Diploma really make?
Profit is not the same as cash. Inventory bought before sale reduces cash first, which is why working capital absorbed £58.9 million in H1 2026. Diploma still produced £110.7 million of free cash flow after operating needs, tax, interest and capital spending. Net debt to EBITDA was 0.8x at 31 March 2026, but EBITDA is not cash and later acquisitions changed the picture. The valuation therefore begins with strong growth, but it must be tested against cash and acquisition returns.
Recent share dilution was modest, but the share count still matters because acquisitions funded with shares can reduce each existing shareholder’s claim on future earnings.
| Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | |
|---|---|---|---|---|---|
| Diluted shares, weighted average | 134.658354 | 134.494807 | 130.260868 | 124.855007 | 124.794473 |
| Shares outstanding at year end | 134.176207 | 134.091975 | 134.034491 | 124.61617 | 124.563515 |
| Diluted shares (average of the year), change (calculated) | 0.1% | 3.3% | 4.3% | 0.0% | 10.1% |
What this means. The two share counts differ because one is the year's average and includes shares that could be created, while the other is the number held on the last day.
What does an investor pay for Diploma today?
| Today (Oct 18, 2026) | |
|---|---|
| Share price | 7,890.00 |
| Market value (every class) (calculated) | 1,059,764.3 |
| Price to book (calculated) | 10.1x |
| P/E on adjusted earnings, last 12 months (calculated) | 38.5x |
| P/E, next 12 months (calculated) | 29.5x |
| Dividend yield (calculated) | 0.8% |
What this means. The figures use pence, so the share price is 78.90 pounds and the market value is 10,597.64 million pounds.