DAVY VIEW

We have reviewed our forecasts ahead of the Q324 trading update on November 7th. We anticipate that end markets have been stable during the period, with continued strong Process Automation, weak Life Sciences and slowing Transport. We make small adjustments to our divisional estimates but leave our group FY24E EBITA unchanged. A higher interest charge is mostly offset by lower share count from the buyback, leading to a 0.4% EPS reduction. FX headwinds are building for FY25, but the lower share count drives small EPS upgrades (1.2%). Further self-help remains on improving organic growth and margins. Delivering this gives scope for further valuation re-rating as IMI still trades at an undemanding 9x EV/EBITDA in CY25E. We maintain our 2,500p price target (PT) and reiterate our ‘Outperform’ rating.