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IMI represents 'interesting' buying opportunity, says Jefferies
After sitting on the sidelines and biding their time on IMI for a while, analysts at Jefferies felt that the stock now represented an "interesting" buying opportunity at its current valuation.
Jefferies noted that while IMI had underperformed UK Industrials by around 30% over the last 12 months, leading to sentiment towards the group being very mixed, the broker thought the negativity had been overdone.
While there are still issues to resolve, the analysts felt IMI's current earnings profile and quality justify its current price target - something it upped to 1,375p from 1,077p.
"IMI continues to divide opinion among investors. The last few years have not gone to plan for the group, but the recent weakness in the share price throws up an interesting buying opportunity for investors," Jefferies said.
"The group is only firing on a few of its cylinders, but it is not broken and the divisions all have appealing intrinsic value," the broker added.
All in all, Jefferies upgraded its stance on the FTSE 250 to 'buy' from 'hold', saying there was "decent recovery potential in IMI".