DAVY VIEW

We believe that much of the positive news and self-help for Spectris is already well known. We suspect there will be more cost saving benefits to come than current guidance suggests, which would help rationalise the reiterated FY24 guidance despite the soft Q124 trading. We see scope for negative organic growth in H124 at the interims on July 30th. The larger H2 weighting incrementally adds slippage risk. We maintain our ‘Neutral’ recommendation as we see the share trading sideways, despite the ongoing share buyback, for the next six months as we await firmer evidence of positive end market momentum. A renewed bid for Oxford Instruments remains a possibility. We increase our price target by 260p to 3,540p.