Morgan Stanley downgrades IMI to ‘equal-weight’ but ups target

The target was upped to 1,200p from 1,160p as the FTSE 250-listed firm announced plans to improve margins

IMI PLC - Morgan Stanley downgrades IMI to ‘equal-weight’
IMI manufactures products to control the precise movement of fluids

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.

Quick facts: IMI PLC

Price: 1178.5 GBX

Market: LSE
Market Cap: £3.21 billion

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