Deutsche Bank has cut its stance on Smiths Group PLC (LON:SMIN) to ‘hold’ from ‘buy’ following the x-ray equipment maker’s recent full-year results.
The German bank also reduced its sum-of-the-parts based target price for the FTSE 100-listed firm to 1,665p, down from 1,750p previously, with the shares currently changing hands at 1,487.50p each, down 0.9% on Monday’s close.
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It also reduced its underlying earnings (EBITA) estimates for Smiths Group by 3% for both 2019 and 2020 and cut its earnings per share (EPS) forecasts by 5% and 4% respectively.
In a note to clients, Deutsche Bank’s analysts said: “Following a change of management in 2015, a renewed strategy, increased investment and portfolio rationalization there was a view that Smiths was evolving.”
They added: “While this is still the case in certain respects, it has relapsed into the earnings downgrade cycle that was prevalent 2012-2016.”
The Deutsche Bank downgrade comes with a number of brokers chopping back targets and rating for Smiths Group in the wake of the numbers.
On Monday, JPMorgan Cazenove cut its rating on the stock to ‘neutral’ from ‘overweight’, saying it sees "limited upside" to its price target of 1,660p.