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IMI upped to overweight as JP Morgan says investment case compelling following challenging period

The bank said while it is “impossible to ignore the disappointing share price and headline financials” for the FTSE 250 engineering group, there has been some mitigation and there were now “indicators of potential upside for the coming years”

IMI PLC - IMI upped to overweight as JP Morgan says investment case compelling following challenging period

IMI PLC (LON:IMI) has been upgraded to ‘overweight’ from ‘neutral’ by analysts at JP Morgan, who said the engineering group now presented a “compelling investment opportunity” following a “challenging 2014-2018 period”.

In a note on Tuesday, the bank also upped its target price for the FTSE 250 firm to 1,300p from 1,100p, saying that while it is “impossible to ignore the disappointing share price and headline financials”, there has been some mitigation and there were now “indicators of potential upside for the coming years”.

READ: IMI says third quarter trading somewhat better than expected following ventilator demand surge

JP Morgan also said the company’s 2019 strategy is “a necessary refresh already yielding results”, with IMI now “a more commercial, efficient and focused group”.

“We forecast IMI to grow earnings in 2020. We believe our outer year forecasts are conservative, underpinned by savings and only assume modest top-line growth as well as little assumed benefit from previous strategies”, the bank said, adding that it now saw the stock as “attractively valued across all metrics”.

IMI shares rose 3.2% to 1,135p in late-morning trading.

Quick facts: IMI PLC

Price: 1278 GBX

LSE:IMI
Market: LSE
Market Cap: £3.48 billion
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