Derwent London Plc (DLN.L) stock analysis

In our weekly check, Derwent London Plc is graded C (A to F). Of 24 checks on debt, profit, cash flow and trend: 13 pass, warnings: 4, red flags: 7.

About Derwent London Plc

Derwent London Plc is a Real Estate company (REIT - Office) based in the United Kingdom, listed on LSE as DLN.L.

What our checks show for DLN.L

Red flags

• Net debt is 6.8x a year of EBITDA (debt/equity 0.41). That limits room in a downturn and raises refinancing risk.
• The net margin fell by 63.5 points over 5 years, to 41.4%: the company keeps less of each sale as profit.
• The gross margin fell by 26.8 points, to 51.4%: costs are rising faster than prices.
• Analysts expect revenue to shrink about 19.1% a year.
• The stock has fallen as much as 80% from a peak. Would you have held through that?
• Recovering from its deepest fall took about 4 years.
• Return on capital (ROCE) is only 3.2%.

Warning signs

• Analysts expect earnings per share to shrink about 8.4% a year.
• Earnings per share fell 16.8% a year over the last 3 years.
• Beta 1.23: the stock usually moves more than the market, both up and down.
• Thinly traded (about 298 thousand shares a day): buying and selling can move the price.

Strengths

• Operating cash flow is 1.42x net profit: the profit arrives as real cash.
• Analysts expect the net margin to improve by 15.3 points from today's 41.4%.
• Revenue grew 16% a year over the last 3 years.
• The company keeps 41.4% of its revenue as net profit.
• Free cash flow is 56.1% of revenue: cash for dividends, buybacks or growth.
• The dividend takes 42% of profit: there is a cushion.

Similar companies

DEI · HIW · SLG · PDM · CDP · KRC

Questions

What grade does Derwent London Plc (DLN.L) have?

In our weekly check, Derwent London Plc is graded C (A to F). Of 24 checks on debt, profit, cash flow and trend: 13 pass, warnings: 4, red flags: 7. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of DLN.L stock?

This week's biggest flags for Derwent London Plc: High debt, Margins falling, Gross margin falling. In total 11 of 24 checks show a warning or a red flag.

What does Derwent London Plc do?

Derwent London Plc is a Real Estate company (REIT - Office) based in the United Kingdom, listed on LSE as DLN.L.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-11-07

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