Smiths Group (1K) | Buy | A temporary (top-line) halt

研报英文原文证据摘录

Smiths Group (1K) | Buy | A temporary (top-line) halt

Smiths Group Buy | Target Price: 2920p

Company description Management

Smiths Group is a focused industrial engineering company with two divisions. Steve Williams, (Chair)

John Crane supplies mission-critical mechanical seals, couplings and filtration Roland Carter, (CEO)

systems, plus a large aftermarket service offering, primarily into energy and Julian Fagge, (CFO)

process industries where uptime, reliability and maintenance spending drive

demand. Flex-tek provides highly engineered solutions across construction Key shareholders

(HVAC/building products), thermal solutions/industrial heat (increasingly Free float 99.39% BlackRock Institutional Trust Company 10.35%

exposed to DC), and aerospace components. Columbia Threadneedle Investments (UK) 5.03%

Harris Associates 5.03%

Investment case Valuation methodology

SMIN is a leading engineering company specialising in attractive We value SMIN using an equal-weighted DCF, relative multiples,

end-markets, with strong market positions, established and SOP valuation methodology.

customer relationships, and a commitment to innovation. Given its two distinct businesses, a SOP is the most appropriate

SMIN is transitioning into a focused engineering company built approach, in our view. This yields a valuation with significant

around John Crane and Flex-Tek, following the planned upside, with SMIN trading at a discount to its key listed

divestments of Detection and Interconnect. The streamlined competitors.

group will target 5-7% organic growth, 20%+ operating margins, Our DCF valuation implies a 2026E P/E multiple of 19x, slightly

and 20%+ returns on capital, unlocking significant value above SMINs longer-term historical average.