IMI (LSE:IMI) - Share price, News & Analysis

Q: What is the Fair Price of IMI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

IMI (£11.81) is trading below our estimate of [[fair value]] (£18.43)

IMI fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	3/6
Past Performance	5/6
Financial Health	4/6
Dividends	2/6

IMI Stock Overview

IMI plc, a specialist engineering company, designs, manufactures, and services engineered products worldwide.

Rewards

Trading at 35.9% below our estimate of its fair value

Earnings are forecast to grow 10.9% per year

Earnings have grown 6.4% per year over the past 5 years

Trading at good value vs. peer average Price-To-Earnings ratio

Trading below our calculated fair Price-To-Earnings ratio

Analysts in good agreement that stock price will rise by 41.9%

Risk Analysis

Has a high level of debt

IMI Competitors

Weir Group

LSE:WEIR

UK£3.9b

Rotork

LSE:ROR

UK£2.1b

Spirax-Sarco Engineering

LSE:SPX

UK£8.0b

Vesuvius

LSE:VSVS

UK£895.0m

Price History & Performance

Summary of all time highs, changes and price drops for IMI
Historical stock prices
Current Share Price	UK£11.81
52 Week High	UK£18.78
52 Week Low	UK£10.69
Beta	1.24
1 Month Change	6.69%
3 Month Change	0.68%
1 Year Change	-28.38%
3 Year Change	25.99%
5 Year Change	-4.91%
Change since IPO	359.28%

Recent News & Updates

Oct 02

Are Investors Undervaluing IMI plc (LON:IMI) By 39%?

Today we will run through one way of estimating the intrinsic value of IMI plc ( LON:IMI ) by taking the expected...

Sep 04

IMI (LON:IMI) Could Be Struggling To Allocate Capital

If you're looking for a multi-bagger, there's a few things to keep an eye out for. One common approach is to try and...

Aug 21

Does IMI (LON:IMI) Have A Healthy Balance Sheet?

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously...

Aug 01

IMI (LON:IMI) Is Increasing Its Dividend To £0.083

IMI plc's ( LON:IMI ) periodic dividend will be increasing on the 16th of September to £0.083, with investors receiving...

Shareholder Returns

	IMI	GB Machinery	GB Market
7D	6.9%	0.3%	-1.4%
1Y	-28.4%	-26.7%	-14.4%

Return vs Industry: IMI underperformed the UK Machinery industry which returned -26.7% over the past year.

Return vs Market: IMI underperformed the UK Market which returned -14.4% over the past year.

Price Volatility

Is IMI's price volatile compared to industry and market?
IMI volatility
IMI Average Weekly Movement	5.0%
Machinery Industry Average Movement	5.3%
Market Average Movement	5.5%
10% most volatile stocks in GB Market	10.8%
10% least volatile stocks in GB Market	2.9%

Stable Share Price: IMI is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: IMI's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1862	10,000	Roy Twite	https://www.imiplc.com

IMI plc, a specialist engineering company, designs, manufactures, and services engineered products worldwide. The company operates through three divisions: IMI Precision Engineering, IMI Critical Engineering, and IMI Hydronic Engineering. The IMI Precision Engineering division develops motion and fluid control technologies for industrial automation, commercial vehicle, life sciences, energy, and rail applications.

IMI Fundamentals Summary

How do IMI's earnings and revenue compare to its market cap?
IMI fundamental statistics
Market Cap	UK£2.94b
Earnings (TTM)	UK£206.20m
Revenue (TTM)	UK£1.93b

14.8x

P/E Ratio

1.6x

P/S Ratio

Is IMI overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
IMI income statement (TTM)
Revenue	UK£1.93b
Cost of Revenue	UK£1.04b
Gross Profit	UK£891.80m
Other Expenses	UK£685.60m
Earnings	UK£206.20m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.80
Gross Margin	46.18%
Net Profit Margin	10.68%
Debt/Equity Ratio	93.0%

How did IMI perform over the long term?

See historical performance and comparison

Dividends

2.0%

Current Dividend Yield

30%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is IMI undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for IMI?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for IMI. This is calculated by dividing IMI's market cap by their current preferred multiple.
What is IMI's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	UK£2.94b

IMI key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.9x
Enterprise Value/EBITDA	10.6x
PEG Ratio	1.4x

Price to Earnings Ratio vs Peers

How does IMI's PE Ratio compare to its peers?

IMI PE Ratio vs Peers

The above table shows the PE ratio for IMI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	22.3x
WEIR Weir Group	22.9x	13.9%	UK£3.9b
ROR Rotork	28.1x	12.9%	UK£2.1b
SPX Spirax-Sarco Engineering	35.8x	10.0%	UK£8.0b
VSVS Vesuvius	6.4x	2.4%	UK£895.0m
IMI IMI	14.8x	10.9%	UK£3.1b

Price-To-Earnings vs Peers: IMI is good value based on its Price-To-Earnings Ratio (14.8x) compared to the peer average (23.3x).

Price to Earnings Ratio vs Industry

How does IMI's PE Ratio compare vs other companies in the European Machinery Industry?

Price-To-Earnings vs Industry: IMI is expensive based on its Price-To-Earnings Ratio (14.8x) compared to the European Machinery industry average (14.3x)

Price to Earnings Ratio vs Fair Ratio

What is IMI's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

IMI PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	14.8x
Fair PE Ratio	24.2x

Price-To-Earnings vs Fair Ratio: IMI is good value based on its Price-To-Earnings Ratio (14.8x) compared to the estimated Fair Price-To-Earnings Ratio (24.3x).

Share Price vs Fair Value

What is the Fair Price of IMI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: IMI (£11.81) is trading below our estimate of fair value (£18.43)

Significantly Below Fair Value: IMI is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

Discover undervalued companies

Future Growth

How is IMI forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

10.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: IMI's forecast earnings growth (10.9% per year) is above the savings rate (0.9%).

Earnings vs Market: IMI's earnings (10.9% per year) are forecast to grow faster than the UK market (8.6% per year).

High Growth Earnings: IMI's earnings are forecast to grow, but not significantly.

Revenue vs Market: IMI's revenue (3% per year) is forecast to grow slower than the UK market (4.4% per year).

High Growth Revenue: IMI's revenue (3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: IMI's Return on Equity is forecast to be high in 3 years time (24.7%)

Discover growth companies

Past Performance

How has IMI performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

6.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: IMI has high quality earnings.

Growing Profit Margin: IMI's current net profit margins (10.7%) are higher than last year (9.7%).

Past Earnings Growth Analysis

Earnings Trend: IMI's earnings have grown by 6.4% per year over the past 5 years.

Accelerating Growth: IMI's earnings growth over the past year (14%) exceeds its 5-year average (6.4% per year).

Earnings vs Industry: IMI earnings growth over the past year (14%) underperformed the Machinery industry 17.5%.

Return on Equity

High ROE: IMI's Return on Equity (23.9%) is considered high.

Discover strong past performing companies

Financial Health

How is IMI's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: IMI's short term assets (£1.0B) exceed its short term liabilities (£760.9M).

Long Term Liabilities: IMI's short term assets (£1.0B) exceed its long term liabilities (£820.1M).

Debt to Equity History and Analysis

Debt Level: IMI's net debt to equity ratio (77.3%) is considered high.

Reducing Debt: IMI's debt to equity ratio has increased from 60.4% to 93% over the past 5 years.

Debt Coverage: IMI's debt is well covered by operating cash flow (32.5%).

Interest Coverage: IMI's interest payments on its debt are well covered by EBIT (23.4x coverage).

Balance Sheet

Discover healthy companies

Dividend

What is IMI current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

2.04%

Current Dividend Yield

Dividend Yield vs Market

IMI Dividend Yield vs Market

How does IMI dividend yield compare to the market?
Segment	Dividend Yield
Company (IMI)	2.0%
Market Bottom 25% (GB)	2.1%
Market Top 25% (GB)	6.0%
Industry Average (Machinery)	2.3%
Analyst forecast in 3 Years (IMI)	2.5%

Notable Dividend: IMI's dividend (2.04%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (2.08%).

High Dividend: IMI's dividend (2.04%) is low compared to the top 25% of dividend payers in the UK market (6.02%).

Stability and Growth of Payments

Stable Dividend: IMI's dividend payments have been volatile in the past 10 years.

Growing Dividend: IMI's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (30.5%), IMI's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (33.7%), IMI's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.5yrs

Average management tenure

CEO

Roy Twite (55 yo)

15.67yrs

Tenure

UK£3,978,000

Compensation

Mr. Roy M. Twite has been the Chief Executive Officer at IMI Plc since May 9, 2019 and its Executive Director since February 1, 2007 and served as its Interim Divisional Managing Director of IMI Precision...

CEO Compensation Analysis

Roy Twite's Compensation vs IMI Earnings

How has Roy Twite's remuneration changed compared to IMI's earnings?
Date	Total Comp.	Salary	Company Earnings
Jun 30 2022	n/a	n/a	UK£206m
Mar 31 2022	n/a	n/a	UK£201m
Dec 31 2021	UK£4m	UK£731k	UK£196m
Sep 30 2021	n/a	n/a	UK£189m
Jun 30 2021	n/a	n/a	UK£181m
Mar 31 2021	n/a	n/a	UK£176m
Dec 31 2020	UK£2m	UK£684k	UK£170m
Jun 30 2020	n/a	n/a	UK£153m
Mar 31 2020	n/a	n/a	UK£153m
Dec 31 2019	UK£2m	UK£636k	UK£153m
Jun 30 2019	n/a	n/a	UK£169m
Mar 31 2019	n/a	n/a	UK£169m
Dec 31 2018	UK£1m	UK£475k	UK£169m
Jun 30 2018	n/a	n/a	UK£146m
Mar 31 2018	n/a	n/a	UK£145m
Dec 31 2017	UK£1m	UK£463k	UK£145m
Jun 30 2017	n/a	n/a	UK£152m
Mar 31 2017	n/a	n/a	UK£141m
Dec 31 2016	UK£955k	UK£454k	UK£131m
Jun 30 2016	n/a	n/a	UK£105m
Mar 31 2016	n/a	n/a	UK£113m
Dec 31 2015	UK£953k	UK£445k	UK£121m

Compensation vs Market: Roy's total compensation ($USD4.55M) is above average for companies of similar size in the UK market ($USD2.72M).

Compensation vs Earnings: Roy's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: IMI's management team is considered experienced (3.5 years average tenure).

Board Members

Experienced Board: IMI's board of directors are considered experienced (5.7 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

LSE:IMI Recent Insider Transactions by Companies or Individuals
Date	Value	Name	Entity	Role	Shares	Max Price
01 Mar 22	BuyUK£18,629	Caroline Dowling	Individual		1,300	UK£14.33
11 Jan 22	BuyUK£134	Daniel Shook	Individual		8	UK£16.79

Ownership Breakdown

What is the ownership structure of IMI?
Owner Type	Number of Shares	Ownership Percentage
Public Companies	0	0%
Private Companies	0	0%
Individual Insiders	378,847	0.1%
Employee Share Scheme	2,794,148	1.1%
General Public	17,944,123	6.9%
Institutions	237,833,178	91.8%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Top Shareholders

Top 25 shareholders own 65.99% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
9.34%	Massachusetts Financial Services Company	24,191,450	£285.7m	-0.62%	0.08%
6.33%	Sprucegrove Investment Management Ltd	16,384,714	£193.5m	-7.09%	3.54%
6.17%	BlackRock, Inc.	15,986,928	£188.8m	0%	0.01%
5.27%	Columbia Management Investment Advisers, LLC	13,639,680	£161.1m	-2.68%	0.05%
4.13%	The Vanguard Group, Inc.	10,700,701	£126.4m	-3.85%	no data
3%	Norges Bank Investment Management	7,772,842	£91.8m	-15.12%	0.01%
2.8%	J.P. Morgan Asset Management, Inc.	7,258,851	£85.7m	3.69%	0.02%
2.69%	Liontrust Asset Management PLC	6,956,772	£82.2m	22.74%	0.39%
2.64%	Schroder Investment Management Limited	6,831,459	£80.7m	-7.95%	0.07%
2.31%	Legal & General Investment Management Limited	5,971,367	£70.5m	-5.21%	0.02%
2.2%	Wellington Management Group LLP	5,693,755	£67.2m	65.76%	0.01%
2.01%	Alecta Pensionsförsäkring, ömsesidigt	5,200,000	£61.4m	0%	0.21%
1.93%	Boston Partners Global Investors, Inc.	4,985,724	£58.9m	81.83%	0.05%
1.83%	American Century Investment Management Inc	4,744,351	£56.0m	170.11%	0.04%
1.5%	Jupiter Fund Management Plc	3,875,919	£45.8m	-46.8%	0.17%
1.44%	Royal London Asset Management Limited	3,728,440	£44.0m	1.67%	0.09%
1.41%	Allianz Asset Management AG	3,653,933	£43.2m	26.51%	0.04%
1.35%	HSBC Global Asset Management (UK) Limited	3,484,361	£41.2m	90.15%	0.04%
1.32%	Dimensional Fund Advisors LP	3,417,901	£40.4m	-17.46%	0.01%
1.27%	M&G Investment Management Limited	3,294,779	£38.9m	-33.89%	0.1%
1.15%	Invesco Ltd.	2,985,609	£35.3m	-10.77%	0.01%
1.08%	IMI plc, ESOP	2,794,148	£33.0m	44.83%	no data
1.03%	J O Hambro Capital Management Limited	2,655,169	£31.4m	42.64%	0.2%
0.91%	Heronbridge Investment Management LLP	2,353,908	£27.8m	-8.73%	2.61%
0.9%	Janus Henderson Group plc	2,327,471	£27.5m	-0.28%	0.02%

Ticker	Exchange	Primary Security	Security Type	Country	Currency	Listed on
IMIA.F	OTCPK (Pink Sheets LLC)	Yes	Ordinary Shares	US	USD	Jan 1992
IMI	LSE (London Stock Exchange)	Yes	Ordinary Shares	GB	GBP	Jan 1992
IMI1	DB (Deutsche Boerse AG)	Yes	Ordinary Shares	DE	EUR	Jan 1992
IMIL	BATS-CHIXE (BATS 'Chi-X Europe')	Yes	Ordinary Shares	GB	GBP	Jan 1992
IMIA.Y	OTCPK (Pink Sheets LLC)		SPONSORED ADR NE	US	USD	Jan 2011

Data	Last Updated (UTC time)
Company Analysis	2022/10/04 00:00
End of Day Share Price	2022/10/04 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31