IMI PLC (LON:IMI) shares dipped on Friday following a downgrade to ‘equal-weight’ from ‘over-weight’ by Morgan Stanley, although the price target was upped to 1,200p from 1,160p.
Analysts at the US investment bank said in a note to clients that there are "more attractive cyclical value plays available", considering IMI’s "limited near-term catalysts" and the market challenges expected in 2020, although there is room for margin gains.
READ: IMI to expand into pharmaceutical sector with US acquisition
The engineering firm announced on Thursday plans to improve margins, including a new £35mln cost-saving programme as well as placing under review lower-margin businesses which account for 20%-30% revenue.
The FTSE 250-listed company reported third-quarter revenues down 2% year-on-year on an organic basis, while it expects second half profits to remain similar to 2018.
IMI shares were down 2.4% to 1,109.00p on Friday, having closed on Thursday with a 4% jump.