Broker snap: UBS downgrades IMI on 'lacklustre' growth

23rd Jan 2012 09:53

UBS has downgraded industrial engineer IMI from buy to neutral, saying it "can't get excited" over the group's growth prospects."We still like IMI's self-help story and balance sheet optionality but after the disappointment over Q3 growth, at least versus our expectations, combined with a recently buoyant share price we find it difficult to remain bullish on the stock," UBS said.The broker expects that the 4% organic growth in IMI will deteriorate in 2012, making it harder to keep the margins trending up."Record margins and improved returns on capital are a sign of management's work, but the growth doesn't seem to be there to the extent of other companies in the sector," the broker said.The target price is cut from 950p to 900p to reflect minor estimate changes to currency and the "lacklustre" growth outlook.BC