Smiths Group PLC

Smiths Group drew a cluster of new analyst price targets ranging from 2,675 GBp to 3,150 GBp, and Simply Wall St's fair value estimate for the company moved to about £29.35 per share from about £28.58. Goldman Sachs reinstated coverage with a Buy rating and a £31.50 price target, citing the company's simplified structure, higher margin potential and what it calls the largest buyback program in its coverage, while JPMorgan raised its target to £31.00 from £28.10 and kept an Overweight stance. On the bearish side, Citi cut Smiths Group to Neutral from Buy while keeping its £30.00 target, saying the post-results share move leaves less obvious valuation upside, and Jefferies lowered its target to £26.75 from £27.50 with a Hold rating, citing near-term challenges and messy consensus forecasts. Behind the revision, revenue growth assumptions shifted from a decline of about 8.97% to projected growth of about 5.76%, net profit margin assumptions moved from about 12.35% to about 16.45%, and the future P/E moved from about 42.2x to about 24.0x. The story also hinges on the plan to focus on high performance flow and heat management businesses, including a potential divestment or demerger of Smiths Interconnect and Smiths Detection, and on the £500m share buyback, with disposal proceeds earmarked for returns and the Future Smiths program targeting higher organic revenue, EPS and operating margins.

Smiths Group reported organic revenue growth and margin expansion for fiscal 2026 while completing a major portfolio reshaping that left the company focused on its John Crane and Flex-Tek businesses. The company completed the sales of Smiths Interconnect and Smiths Detection, realizing £3.3 billion of enterprise value, acquired DRC Heat Transfer in April for £165 million, and agreed sales of three non-core Flex-Tek industrial businesses for £40 million. Continuing-operations revenue rose 1.2% organically to £1.9 billion, headline operating profit increased 1.9% organically to £399 million, and headline operating margin rose 20 basis points to 20.6%. Headline earnings per share increased 6% to 86.8 pence, total group headline EPS rose 12% to 135.7 pence, and the board recommended a final dividend of 33.5 pence per share, bringing the full-year dividend to 48.5 pence, up 5.4%. For fiscal 2027, Smiths expects organic revenue growth of about 4% and headline operating margin of approximately 21%, and said a further £1.5 billion of buybacks related to the Detection sale remains to be executed and is expected to be substantially completed by the end of calendar 2027.