Spirax Sarco Engineering (SPX) AI Stock Analysis

• Market Cap: £4.36B
• Dividend Yield: 2.96%
• Average Volume (3M): 179.82K
• Price to Earnings (P/E): 22.8
• Beta (1Y): 1.36
• Revenue Growth: -1.03%
• EPS Growth: 4.06%
• Country: UK
• Employees: 9,960
• Sector: Industrials
• Sector Strength: 87
• Industry: Industrial - Machinery
• EPS (TTM): 1.49
• Shares Outstanding: 73,776,050
• 10 Day Avg. Volume: 180,192
• 30 Day Avg. Volume: 179,817
• PEG Ratio: -8.51
• Price to Book (P/B): 6.68
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 68.71
• 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: £7,038.13
• Price Target Upside: 13.98% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8

• Rating: 74 Outperform
• Price Target: 6,916.00p ▲(12.00%Upside)

Spirax Sarco Engineering has a robust financial foundation, highlighted by strong profitability and cash flow generation. Positive corporate events, such as shareholder support and executive share purchases, underscore confidence in its strategic direction. However, moderate valuation metrics and some technical resistance temper the overall score.

Positive Factors

Demand and Growth

Demand was strong in Industrial Process Heating and improving in semiconductors, with good growth in Biopharma orders and Process Industries.

Financial Performance

The trading update from Spirax was robust, with unchanged guidance and only a minor downgrade due to foreign exchange factors.

Negative Factors

Complexity of Investment Case

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

Market Reaction

The shares are down, which is considered an overly harsh reaction to the update, suggesting that the market's response might be exaggerated.

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

Spirax Sarco Engineering demonstrates solid financial health with strong cash flow generation and profitability. The balance sheet shows a good mix of equity and debt, though rising leverage could be a concern. The company has maintained steady revenue growth and profitability, positioning it well within the industrial machinery sector.

Income Statement

Spirax Sarco Engineering shows strong profitability with a consistent EBIT margin averaging around 18% over the years. Revenue has grown steadily, albeit at a moderate pace. The net profit margin has been stable, indicating efficient cost management. However, the gross profit margin has fluctuated, suggesting some variability in cost of goods sold.

Balance Sheet

The company maintains a healthy equity ratio, consistently above 40%, which indicates a strong capital structure. However, the debt-to-equity ratio has increased, reflecting rising leverage which could pose risks if not managed carefully. Return on Equity remains robust, reflecting effective use of shareholder funds.

Cash Flow

Operating cash flow has been solid, supporting high levels of free cash flow. The free cash flow to net income ratio is strong, indicating efficient cash conversion. While capital expenditures have varied, the company has been successful in maintaining positive free cash flow growth.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.67B	1.68B	1.61B	1.34B	1.19B
Gross Profit	333.90M	1.28B	576.70M	492.30M	398.50M
EBITDA	378.30M	390.60M	402.10M	392.00M	324.30M
Net Income	191.20M	183.60M	224.70M	234.60M	173.60M
Balance Sheet
Total Assets	2.65B	2.71B	2.78B	1.86B	1.74B
Cash, Cash Equivalents and Short-Term Investments	334.20M	359.70M	328.90M	274.60M	246.20M
Total Debt	1.03B	1.12B	1.08B	465.20M	509.10M
Total Liabilities	1.44B	1.55B	1.62B	853.20M	889.10M
Stockholders Equity	1.21B	1.16B	1.17B	1.01B	851.30M
Cash Flow
Free Cash Flow	238.50M	193.20M	113.70M	204.20M	202.40M
Operating Cash Flow	312.80M	298.60M	231.20M	268.30M	252.00M
Investing Cash Flow	-65.30M	-95.70M	-576.60M	-62.10M	-52.50M
Financing Cash Flow	-215.00M	-219.20M	362.20M	-204.80M	-143.90M

Spirax Sarco Engineering Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6175.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SPX, the sentiment is Positive. The current price of 6175 is above the 20-day moving average (MA) of 5918.50, above the 50-day MA of 5932.78, and below the 200-day MA of 6614.02, indicating a neutral trend. The MACD of 27.97 indicates Negative momentum. The RSI at 60.70 is Neutral, neither overbought nor oversold. The STOCH value of 67.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:SPX.

Spirax Sarco Engineering Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SMIN	81 Outperform	£7.33B	24.96	13.99%	1.28%	6.10%	33.05%
IMI	78 Outperform	£5.15B	21.66	23.50%	1.48%	0.64%	4.92%
SPX	74 Outperform	£4.36B	22.80	16.16%	2.96%	-1.03%	4.06%
WEIR	74 Outperform	£6.36B	20.38	17.83%	1.32%	-4.95%	36.95%
ROR	71 Outperform	£2.68B	26.45	17.03%	2.29%	4.91%	-7.75%
Sector *	68 Neutral	£2.94B	10.24	8.40%	3.45%	2.87%	-9.95%
MRO	56 Neutral	£6.62B	―	-1.53%	1.54%	3.52%	-24.01%

Spirax Sarco Engineering Corporate Events

Spirax Group Announces Management Share Transactions

Spirax Group plc has announced recent transactions involving its senior management under the company’s employee share schemes. These transactions, conducted in accordance with the UK Market Abuse Regulation, include acquisitions of partnership and matching shares as well as a restructuring of shareholding by one of the managing directors. The transactions were executed on the London Stock Exchange and involve key figures such as the Group CEO, HR Director, and Sustainability Director, reflecting ongoing internal financial activities within the company.

The most recent analyst rating on (GB:SPX) stock is a Buy with a £7850.00 price target. To see the full list of analyst forecasts on Spirax Sarco Engineering stock, see the GB:SPX Stock Forecast page.

Spirax Group plc AGM Results: All Resolutions Passed

At the recent Annual General Meeting of Spirax Group plc, all resolutions were successfully passed, reflecting strong shareholder support for the company’s strategic direction. The meeting’s outcomes, including the approval of special resolutions, underscore the company’s commitment to its growth and sustainability objectives, aligning with its role in advancing industrial efficiency and decarbonization efforts. The resolutions will be made available for inspection and filed with relevant authorities, ensuring transparency and compliance.

The most recent analyst rating on (GB:SPX) stock is a Buy with a £7850.00 price target. To see the full list of analyst forecasts on Spirax Sarco Engineering stock, see the GB:SPX Stock Forecast page.

Spirax Sarco Engineering Maintains Full-Year Guidance Amid Economic Challenges

Spirax Sarco Engineering has maintained its full-year guidance despite a challenging economic environment marked by negative industrial production growth in key European markets and macroeconomic uncertainties due to trade tariffs. The company has focused on operational priorities such as consultative solution-selling, manufacturing improvements, and restructuring, which is expected to yield significant annual savings. While demand trends remain consistent with previous forecasts, the company anticipates stronger revenue growth and profit margins in the second half of the year, driven by increased MRO and solution sales and the recovery of Biopharm and Semicon sectors.

The most recent analyst rating on (GB:SPX) stock is a Buy with a £7850.00 price target. To see the full list of analyst forecasts on Spirax Sarco Engineering stock, see the GB:SPX Stock Forecast page.

Spirax Group Executives Acquire Shares Under Incentive Plan

Spirax Group plc announced the acquisition of shares by key executives under the company’s Share Incentive Plan. This transaction reflects the company’s ongoing commitment to aligning the interests of its leadership with shareholders. The acquisitions were conducted on the London Stock Exchange, with each executive acquiring a combination of Partnership and Matching Shares, signaling confidence in the company’s future performance.

Spirax Group Announces Board Change Following Acquisition

Spirax Group plc announced a change in its board as Tim Cobbold stepped down from the board of TI Fluid Systems plc following its acquisition by ABC Technologies Acquisitions Limited. This change reflects the company’s ongoing strategic adjustments and may impact its governance and stakeholder relationships.

Spirax Group Announces Board Changes and Share Transactions

Spirax Group plc announced recent transactions related to its employee share schemes, in compliance with UK Market Abuse Regulation. Additionally, Maria Antoniou will join the board as a Non-Executive Director and Chair of the Remuneration Committee, having recently purchased 509 shares in the company. These developments indicate active management of executive roles and shareholding, potentially impacting the company’s governance and stakeholder confidence.

Spirax Group Releases 2024 Annual Report and Sets Date for 2025 AGM

Spirax Group plc has released its Annual Report and Accounts for 2024 and announced the date for its 2025 Annual General Meeting. The report highlights the company’s ongoing commitment to sustainability and innovation in industrial processes, with a focus on decarbonization and efficiency improvements. This announcement underscores Spirax Group’s strategic positioning in the market as a leader in enabling industrial transitions to net zero, which is expected to have a positive impact on its stakeholders and industry reputation.

Spirax Group Executives Increase Shareholdings, Aligning Interests with Stakeholders

Spirax Group plc announced that key executives, including Group CEO Nimesh Patel, CFO Louisa Burdett, and General Counsel Céline Barroche, have purchased shares in the company. These transactions, conducted on the London Stock Exchange, reflect a strategic move to align management interests with shareholders, potentially enhancing stakeholder confidence in the company’s future performance.