What Does IMI plc's (LON:IMI) Share Price Indicate?

IMI plc (LON:IMI), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the LSE. The company is now trading at yearly-high levels following the recent surge in its share price. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at IMI’s outlook and value based on the most recent financial data to see if the opportunity still exists.

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What's The Opportunity In IMI?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 3.4% below our intrinsic value, which means if you buy IMI today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth £24.57, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, IMI has a low beta, which suggests its share price is less volatile than the wider market.

View our latest analysis for IMI

What does the future of IMI look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. IMI's earnings over the next few years are expected to increase by 42%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in IMI’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on IMI, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into IMI, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 1 warning sign for IMI you should know about.

If you are no longer interested in IMI, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.