On a miserable day for the stock market, the FTSE 100’s leading riser was one of the less heralded names in the index, specialist fluid engineer IMI PLC (LSE:IMI), after it was the beneficiary of an upgrade from Goldman Sachs (NYSE:GS).
The stock rose up 3.6% to 1,607p after the bank hiked its 12-month target price to 2,020p from 1,780p.
Goldman says it sees the stock as a beneficiary of both a sustained "capex super-cycle" as well as a potential recovery in short-cycle industrial production, where recent US ISM manufacturing data suggest inventories may be approaching a trough.
The bank said its more “optimistic view on demand" across the Critical Engineering and Hydronic Engineering segments supports sales and earnings forecasts for 2025 that are respectively around 2% and 5% above the broader analyst consensus.
“Moreover, IMI’s shares have historically outperformed during the trough-to-peak phase of the manufacturing PMI cycle, and we see scope for the shares to outperform over the next 12m,” Goldman added.
It's not the only bank to pick out IMI as a favourite, with Stifel selecting the share are one of its top stocks for 2024, highlighting premium profit margins at a discount valuation – “a rare combination in this sector”.