Broker snap: Credit Suisse less wary towards Europe, and IMI

15th Mar 2012 12:04

Broker Credit Suisse has today lifted its target price on shares of engineering group IMI significantly, to 930p from 740p previously. That on a more stable outlook for Europe than it had assumed, which has led it to increase its forecasts for adjusted earnings before interest and tax by 12.2% and 14.9% for the years 2012 and 2013, respectively. Another factor behind the upgrades is the consolidation of acquisitions. Nonetheless, even now they are forecasting growth of only 2.1% in 2012, which compares negatively to the 5% growth forecast for the sector, as they believe that IMI remains exposed to less attractive end markets in 2012.In fact, their final conclusion is that , "we believe that IMI will again be a growth laggard in 2012 and set our 930p target price on the basis of IMI trading on 11.8x 2012E, a 10% discount to the UK sector (13.1x)." AB