Smiths Group upgraded to 'sector perform' by RBC Capital

11th Dec 2015 12:46

(ShareCast News) - Smiths Group on Friday was given a ratings upgrade by RBC Capital Markets to 'sector perform' from 'underperform' ahead of the engineer's strategy statement.RBC also raised its target price to 1,050p from 900p, saying that shares in Smiths are "less obviously expensive than they were"."We view them as sector performers into new management's strategy update (expected alongside first half results provisionally due 16 March), even though the trading environment remains challenging," RBC analysts Andrew Carter, Wasi Rizvi and Matthew Spurr said in a note.Newly appointed Smiths chief executive Andy Reynolds and new chief financial officer Chris O'Shea will be under closely scrutinised when they present their first results in March.RBC said the results are unlikely to surprise on the upside but investors will focusing on their strategy update. "We anticipate this emphasizing the potential for higher sales growth and margins than previously as well as the usual net working capital improvement possibilities."Shares fell 0.53% to 945p at 1257 GMT.