Smiths share price underperforms as JPMorgan points to limited upside

on Sep 24, 2018
Updated: Mar 11, 2020

Shares in Smiths Group (LON:SMIN) have fallen into the red in today’s session, as analysts at JPMorgan Cazenove trimmed their stance on the company, pointing to limited upside. The move follows the FTSE 100 group’s full-year results last week when the company reported a drop in full-year revenue and profit, pressured by downbeat performance at its Medical unit.

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As of 13:29 BST, Smith’s share price had given up 1.09 percent to 1,504.00p. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.24 percent lower at 7,472.28 points.

JPMorgan trims stance on Smiths

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JPMorgan Cazenove trimmed its rating on Smiths from ‘overweight’ to ‘neutral’ today, also lowering its price target on the shares from 1,690p to 1,660p. Proactive Investors quoted the analysts as saying that that an improvement in the second half of the year had returned the FTSE 100 group to underlying revenue growth of two percent for the full year.

“As expected there was a sharp bounce in organic growth in the Detection division and the pace of organic growth accelerated in most other divisions,” the broker pointed out, noting that the integration of Morpho Detection, which Smiths acquired during the year, “had progressed smoothly resulting in the cost savings being delivered more swiftly than anticipated”.

The newswire further quoted the analysts as noting that they expect “2019 to be a year of steady progress in the operating performance of the group”.

Analyst ratings update

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As of September 21, the consensus forecast amongst 17 polled investment analysts covering Smiths Group for the Financial Times has it that the company will outperform the market. According to MarketBeat, the blue-chip engineering group currently has a consensus ‘buy’ rating and an average price target of 1,715.91p.

As of 13:47 BST, Monday, 24 September, Smiths Group plc share price is 1,504.00p.


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