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 (£12.29) is trading below our estimate of [[fair value]] (£19.77)

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

IMI Stock Overview

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

Rewards

Trading at 37.8% below our estimate of its fair value

Earnings are forecast to grow 11.34% per year

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

Risk Analysis

Has a high level of debt

Unstable dividend track record

IMI Competitors

Weir Group

LSE:WEIR

UK£4.1b

Rotork

LSE:ROR

UK£2.1b

Spirax-Sarco Engineering

LSE:SPX

UK£8.2b

Bodycote

LSE:BOY

UK£1.1b

Price History & Performance

Summary of all time highs, changes and price drops for IMI
Historical stock prices
Current Share Price	UK£12.29
52 Week High	UK£18.78
52 Week Low	UK£11.37
Beta	1.21
1 Month Change	1.40%
3 Month Change	-2.38%
1 Year Change	-31.34%
3 Year Change	27.78%
5 Year Change	6.41%
Change since IPO	377.95%

Recent News & Updates

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...

Jul 24

Should You Investigate IMI plc (LON:IMI) At UK£12.85?

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...

Jul 09

Is Now The Time To Put IMI (LON:IMI) On Your Watchlist?

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to...

Shareholder Returns

	IMI	GB Machinery	GB Market
7D	-5.4%	-4.7%	-0.2%
1Y	-31.3%	-24.2%	-9.0%

Return vs Industry: IMI underperformed the UK Machinery industry which returned -22.6% over the past year.

Return vs Market: IMI underperformed the UK Market which returned -8.2% over the past year.

Price Volatility

Is IMI's price volatile compared to industry and market?
IMI volatility
IMI Average Weekly Movement	4.9%
Machinery Industry Average Movement	4.9%
Market Average Movement	5.3%
10% most volatile stocks in GB Market	10.9%
10% least volatile stocks in GB Market	2.7%

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£3.18b
Earnings (TTM)	UK£206.20m
Revenue (TTM)	UK£1.93b

15.4x

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

6/6

Valuation Score 6/6

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£3.18b

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	2x
Enterprise Value/EBITDA	11.3x
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	27x
WEIR Weir Group	24.1x	13.7%	UK£4.1b
ROR Rotork	28.3x	12.2%	UK£2.1b
SPX Spirax-Sarco Engineering	36.8x	10.6%	UK£8.2b
BOY Bodycote	18.7x	12.5%	UK£1.1b
IMI IMI	15.4x	11.3%	UK£3.2b

Price-To-Earnings vs Peers: IMI is good value based on its Price-To-Earnings Ratio (15.4x) compared to the peer average (27x).

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 good value based on its Price-To-Earnings Ratio (15.4x) compared to the UK Machinery industry average (17.9x)

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	15.4x
Fair PE Ratio	24.6x

Price-To-Earnings vs Fair Ratio: IMI is good value based on its Price-To-Earnings Ratio (15.4x) compared to the estimated Fair Price-To-Earnings Ratio (24.6x).

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 (£12.29) is trading below our estimate of fair value (£19.77)

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.

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Future Growth

How is IMI forecast to perform in the next 1 to 3 years based on estimates from 15 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

11.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: IMI's forecast earnings growth (11.3% per year) is above the savings rate (0.9%).

Earnings vs Market: IMI's earnings (11.3% per year) are forecast to grow faster than the UK market (9.8% per year).

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

Revenue vs Market: IMI's revenue (3.1% per year) is forecast to grow slower than the UK market (4.6% per year).

High Growth Revenue: IMI's revenue (3.1% 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 (27%)

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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 54.3%.

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

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Dividend

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

Dividend Score

3/6

Dividend Score 3/6

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

1.96%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: IMI's dividend (1.96%) is higher than the bottom 25% of dividend payers in the UK market (1.86%).

High Dividend: IMI's dividend (1.96%) is low compared to the top 25% of dividend payers in the UK market (5.13%).

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?

4.0yrs

Average management tenure

CEO

Roy Twite (55 yo)

3.25yrs

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

Compensation vs Market: Roy's total compensation ($USD4.79M) is above average for companies of similar size in the UK market ($USD3.13M).

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 (4 years average tenure).

Board Members

Experienced Board: IMI's board of directors are considered experienced (5.5 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

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/08/17 00:00
End of Day Share Price	2022/08/17 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31