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Investing.com - Kepler Cheuvreux has raised its price target on Smiths Group (LON:SMIN) stock to GBP28.00 from GBP26.80 while maintaining a Buy rating following the company’s agreement to sell its Smiths Interconnect business.
The industrial technology company has agreed to sell Smiths Interconnect for an enterprise value of GBP1.3 billion, which represents a purchase multiple of 15 times FY 2025 EBITDA, according to Kepler Cheuvreux.
The sale price is approximately 30% above prior consensus expectations of around GBP1.0 billion, which Kepler Cheuvreux described as "a strong outcome."
The disposal proceeds will be received in cash, with Smiths Group intending to return a large portion to shareholders, though specific details of the capital return were not disclosed.
Kepler Cheuvreux noted that the transaction marks progress on Smiths Group’s transformation into a streamlined engineering group and highlights "significant value potential" within its portfolio of businesses.
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