| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 844.46 | -69 |
| Intrinsic value (DCF) | 819.07 | -70 |
| Graham-Dodd Method | 2.00 | -100 |
| Graham Formula | 8.36 | -100 |
IMI plc (LSE: IMI) is a UK-based global leader in specialist engineering, delivering precision-engineered solutions across critical industries. Operating through three divisions—IMI Precision Engineering, IMI Critical Engineering, and IMI Hydronic Engineering—the company serves diverse sectors including industrial automation, energy, life sciences, and commercial HVAC. IMI Precision Engineering focuses on motion and fluid control technologies, while IMI Critical Engineering provides high-performance valves and actuators for demanding environments like nuclear, oil & gas, and power generation. IMI Hydronic Engineering specializes in energy-efficient heating and cooling systems for buildings. With a heritage dating back to 1862, IMI combines innovation with deep industry expertise, supported by a portfolio of trusted brands such as Norgren, IMI CCI, and IMI TA. The company’s global footprint and focus on sustainability position it as a key player in industrial and infrastructure markets.
IMI plc presents a compelling investment case due to its diversified industrial exposure, strong margins, and focus on high-value engineering solutions. The company’s critical engineering division benefits from long-term energy infrastructure demand, while precision engineering leverages automation trends. A solid balance sheet (net debt/EBITDA ~1.5x) and consistent cash flow support its 3.1% dividend yield. Risks include cyclical exposure to industrial capex and potential margin pressure from input costs. However, IMI’s niche positioning and recurring service revenue (30% of sales) provide resilience. Trading at ~15x P/E, it offers reasonable value relative to peers given its growth in aftermarket services and energy transition opportunities.
IMI’s competitive advantage stems from its specialization in high-performance fluid control and engineered solutions, where technical expertise and regulatory certifications create barriers to entry. In precision engineering, brands like Norgren and Herion dominate niche applications (e.g., life science microfluidics), competing on reliability rather than price. The critical engineering division holds leadership in nuclear and severe-service valves (via IMI CCI), with proprietary designs for extreme temperatures/pressures. Hydronic Engineering differentiates through energy-saving HVAC technologies, aligning with EU decarbonization policies. However, IMI faces pressure from larger conglomerates like Emerson (EMR) in automation and Flowserve (FLS) in valves, which have broader portfolios and scale. IMI mitigates this by focusing on customization and service-led models. Its R&D spend (2.5% of sales) targets adjacencies like hydrogen valves, but geographic concentration in Europe (50% of revenue) remains a relative weakness versus global peers.