Analyst at Berenberg raised their target price on flow control specialist IMI from 995.0p to 1,485.0p, stating the group was “quick off the mark”.
Berenberg said IMI had continued to go from “strength to strength” since it took a more positive stance on the stock in September 2020, with the positive momentum seen at the tail end of 2020 continuing into the first quarter of 2021.
IMI reported an 8% year-on-year organic revenue growth for the quarter, with an acceleration of cost savings and an upgrade to full-year guidance at this relatively early stage.
The German bank noted that IMI management had also taken the opportunity to raise its sustainable margin guidance to 18-20%, a level not seen since 2013, and announce a £200.0m share buyback.
“We are impressed with how IMI has evolved over the past 18 months, but retain our ‘hold’ rating and reiterate our preference for Rotork in the flow control space,” said Berenberg.
“For FY 2021, shares trade on 18x P/E and 15x EV/EBIT. We increase our forecasts and update valuation to reflect peer-based valuation multiples.”
