Electrocomponents a 'great' company with 'OK' valuation, says JPMorgan

JPM noted that trading in the third quarter bounced back quicker than anticipated, with 8% group like-for-like growth, versus a 4% decline in the second quarter.

"This will be offset by higher freight and other costs in the short-term; however, we regard these as temporary, whereas the market share gains are likely permanent," JPM said.

"Longer-term, the combination of its digital offering in a post-Covid world (circa 62% of revenues), and an emerging M&A strategy, with 3-4x the number of active M&A opportunities versus two years ago, means we can see the stock re-rating towards circa 30x price-to-earnings."

This compares to c21x FY2 P/E currently.

At 1040 GMT, the shares were up 3.8% at 979p.