Spirax Sarco Engineering (SPX) AI Stock Analysis

• Market Cap: £4.26B
• Dividend Yield: 2.79%
• Average Volume (3M): 313.12K
• Price to Earnings (P/E): 22.3
• Beta (1Y): 1.42
• Revenue Growth: -1.03%
• EPS Growth: 4.13%
• Country: UK
• Employees: 10,000
• Sector: Industrials
• Sector Strength: 63
• Industry: Industrial - Machinery
• EPS (TTM): 2.60
• Shares Outstanding: 73,776,050
• 10 Day Avg. Volume: 486,835
• 30 Day Avg. Volume: 313,115
• PEG Ratio: 5.40
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.97
• Price to Cash Flow (P/CF): 26.50
• P/FCF Ratio: 35.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: 7,550.00p
• Price Target Upside: 30.62% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12

Spirax Sarco Engineering is well-positioned within the industrial machinery sector with solid financial performance and strategic growth initiatives. However, technical indicators suggest caution due to current price trends. The stock offers reasonable valuation metrics with a moderate dividend yield, and recent corporate events bolster confidence in future growth.

Positive Factors

Management Outlook

The management's unchanged FY24F outlook is expected to be received well by the market.

Sales Growth

All 3 divisions have higher OCC sales growth at the 10m stage compared to the 1H24 stage.

Trading Update

Spirax has issued a robust 10m Trading Update, which is expected to move the shares higher.

Negative Factors

FX Headwind

Consensus is expected to drift lower due to a 4% FX headwind, which may lead to some numbers moving down.

Market Complexity

Investors have to work hard to fully understand Spirax's likely evolution due to the complexity and moving parts.

Market Sentiment

Sentiment on the stock is at a low ebb, and while the narratives emanating from today's CMD were supportive of the equity story in the M/LT, it remains a quality business, the pendulum has swung a long way negative.

Spirax Sarco Engineering Business Overview & Revenue Model

Company Description

Spirax-Sarco Engineering plc provides engineered solutions for the users of industrial and commercial steam systems, electrical heating and temperature management systems, and pumps and fluid path technologies. It offers industrial and commercial steam systems, including condensate management, controls, and thermal energy management products and solutions for heating and curing, cleaning and sterilizing, hot water generation, space heating, and humidification; electrical process heating and temperature management solutions, such as industrial heaters and systems, heat tracing, and various component technologies for industrial processes, heaters, and systems; and peristaltic and niche pumps and associated fluid path technologies, including pumps, tubing, and specialty filling systems and products for single-use applications. The company serves food, beverage, pharmaceutical and biotechnology, oil, gas, chemical, healthcare, power generation, buildings, mining and precious metal processing, water and wastewater, and pulp and paper, as well as original equipment manufacturers. The company sells its products directly, as well as through distributors. It operates in Europe, the Middle East, and Africa; the Asia Pacific; and the Americas. Spirax-Sarco Engineering plc was founded in 1888 and is headquartered in Cheltenham, the United Kingdom.

How the Company Makes Money

Spirax Sarco Engineering generates revenue primarily through the sale of its specialized products and solutions that optimize steam and thermal energy systems for industrial clients. The company's key revenue streams include direct sales of equipment, aftermarket services, and solutions-based consulting to help businesses improve their operational efficiency. Spirax Sarco also benefits from its global reach and extensive distribution network, which enables it to maintain strong customer relationships and secure long-term contracts. Additionally, strategic acquisitions and partnerships enhance its portfolio and market presence, contributing to its earnings.

Spirax Sarco Engineering Financial Statement Overview

Summary

Income Statement

Balance Sheet

Cash Flow

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
1.66B	1.68B	1.61B	1.34B	1.19B	1.24B
	Gross Profit
319.40M	1.28B	576.70M	492.30M	398.50M	433.80M
	EBIT
306.30M	298.40M	314.80M	319.70M	242.50M	253.60M
	EBITDA
376.50M	390.60M	402.10M	392.00M	324.30M	316.70M
	Net Income Common Stockholders
191.90M	183.60M	224.70M	234.60M	173.60M	166.60M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
187.10M	359.70M	328.90M	274.60M	246.20M	330.60M
	Total Assets
1.55B	2.71B	2.78B	1.86B	1.74B	1.86B
	Total Debt
422.90M	1.12B	1.08B	465.20M	509.10M	664.70M
	Net Debt
235.80M	763.40M	755.60M	190.60M	262.90M	334.10M
	Total Liabilities
786.90M	1.55B	1.62B	853.20M	889.10M	1.03B
	Stockholders Equity
765.80M	1.16B	1.17B	1.01B	851.30M	825.30M
Cash Flow		Free Cash Flow
197.70M	193.20M	113.70M	204.20M	202.40M	159.50M
	Operating Cash Flow
285.70M	298.60M	231.20M	268.30M	252.00M	221.90M
	Investing Cash Flow
-87.50M	-95.70M	-576.60M	-62.10M	-52.50M	-176.90M
	Financing Cash Flow
-240.50M	-219.20M	362.20M	-204.80M	-143.90M	-50.50M

Spirax Sarco Engineering Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SMIN	75 Outperform	£6.00B	19.99	13.99%	2.46%	6.10%	33.05%
IMI	74 Outperform	£4.28B	17.56	23.50%	1.73%	0.64%	4.92%
WEIR	69 Neutral	£5.29B	16.94	17.83%	1.88%	-4.95%	36.95%
SPX	66 Neutral	£4.26B	22.28	16.16%	2.79%	-1.03%	4.13%
JMAT	66 Neutral	£2.04B	4.20	21.80%	6.31%	-15.51%	200.70%
CRDA	63 Neutral	£3.85B	24.26	6.84%	3.96%	-3.92%	-7.32%
Sector *	62 Neutral	$7.25B	12.39	3.08%	3.39%	3.63%	-14.32%

Spirax Sarco Engineering Corporate Events

Spirax Sarco Announces Share Transactions by Key Executives

Spirax Sarco Engineering has announced the vesting and sale of shares by key managerial personnel under the Spirax Sarco Performance Share Plan (2022 Award). The transactions, conducted on the London Stock Exchange, involve the Group CEO and other directors, reflecting the company’s ongoing commitment to aligning managerial interests with shareholder value.

Spirax Sarco Engineering Awards Shares to Key Executives Under 2025 PSP

Spirax Sarco Engineering announced the award of shares to several key executives under the Spirax-Sarco Performance Share Plan (PSP) for 2025, which will vest in 2028 subject to performance conditions. This move signifies a strategic effort to align the interests of its leadership with the company’s long-term performance goals, potentially impacting its operational focus and stakeholder value.

Spirax Group PLC Announces Change in Major Holdings

Spirax Group PLC, a UK-based company, has announced a change in major holdings due to the acquisition or disposal of financial instruments by Eleva Capital SAS, a Paris-registered entity. This notification indicates that Eleva Capital SAS now holds a total of 3.08% of voting rights in Spirax Group, with 2.05% attached to shares and 1.03% through financial instruments. This adjustment in holdings reflects Eleva Capital’s strategic positioning and potential influence within the company, impacting Spirax Group’s shareholder dynamics.

Spirax Group Proposes Increased Final Dividend for 2024

Spirax Group plc has announced a proposed final dividend of 117.5 pence per share for 2024, subject to shareholder approval, marking an increase from the previous year. This announcement reflects the company’s ongoing commitment to delivering value to its shareholders and maintaining a strong financial position. The total dividend for the year amounts to 165.0 pence per share, indicating a positive financial performance. The dividend is scheduled to be paid on 23 May 2025 to shareholders on the register by 25 April 2025, highlighting the company’s stable and promising outlook.

Spirax Group Achieves Strong 2024 Results Amid Challenging Market Conditions

Spirax Group plc reported its 2024 full-year results, highlighting a 4% organic revenue growth despite challenging global industrial production conditions. The company achieved a 7% increase in statutory operating profit and improved profit margins, driven by operational improvements and strategic investments. Spirax Group’s restructuring efforts are expected to yield significant benefits for future growth, with a focus on maintaining organic sales growth ahead of industrial production in 2025. The company’s strategic initiatives, including the Together for Growth Strategy, aim to position Spirax Group for long-term growth opportunities while simplifying operations and leveraging resources effectively.

Spirax Group Announces Employee Share Scheme Transactions

Spirax Group plc has announced transactions related to its employee share schemes, in compliance with the UK Market Abuse Regulation. The transactions involve the acquisition and award of shares under the company’s Share Incentive Plan, impacting key executives including the Group CEO, HR Director, Sustainability Director, and Managing Director. These transactions are part of the company’s efforts to align management interests with shareholder value, potentially enhancing stakeholder confidence.

Spirax Group Announces Employee Share Scheme Transactions

Spirax Group plc has announced transactions related to its employee share schemes as per UK Market Abuse Regulation. This includes acquisitions and awards under the Share Incentive Plan involving key company executives. The transactions reflect a structured approach to managing share distributions within the company, potentially reinforcing stakeholder confidence and aligning managerial interests with shareholder value.

Spirax Group Appoints Maria Antoniou to Board, Enhancing Strategic Growth

Spirax Group has announced the appointment of Maria Antoniou as an Independent Non-Executive Board Director and Chair of the Remuneration Committee, effective from June 2025. Maria, who brings extensive international HR experience from her role at Morgan Advanced Materials and previous senior roles at large organizations, will succeed Jane Kingston. This appointment is part of Spirax Group’s succession planning efforts to support its Together for Growth Strategy. The transition highlights Spirax’s focus on strategic growth and sustainable development, aligning with their goal to enhance stakeholder value and operational excellence.

Spirax Group Reports Key Executive Share Transactions

Spirax Group plc has announced recent transactions related to its employee share schemes in compliance with the UK Market Abuse Regulation. The transactions involve acquisitions and awards of shares to key executives, including the Group Chief Executive Officer, Group HR Director, Group Sustainability Director, and interim directors, highlighting the company’s ongoing commitment to employee incentives and shareholder value.