Andrew Douglas, an analyst from Jefferies, maintained the Hold rating on Smiths Group plc. The associated price target remains the same with p1,930.00.
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Andrew Douglas has given his Hold rating due to a combination of factors surrounding Smiths Group plc’s recent strategic decisions. The company announced the sale of its Interconnect business to Molex for £1.3 billion, which is seen as a positive move in terms of valuation, representing a 15x FY25 EV/EBITDA multiple. This transaction aligns with the group’s strategy to unlock value across its portfolio, marking a significant milestone.
Despite the favorable valuation and expected positive market reaction, Douglas maintains a Hold rating, possibly due to uncertainties regarding the future disposal of other divisions, such as Detection. While the Interconnect sale is a step in the right direction, it was anticipated to be the more straightforward of potential disposals. The upcoming 1Q26 Trading Update and management’s plans for the proceeds will be crucial in determining further strategic direction, which may influence future ratings.