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Investing.com - UBS upgraded Spirax Group PLC (LON:SPX) from Neutral to Buy on Tuesday, while significantly raising its price target to GBP105.00 from GBP75.00. The company, currently trading with a P/E ratio of 32x, demonstrates strong financial health with an impressive gross profit margin of 76%.
The upgrade follows UBS’s comprehensive analysis covering Steam Thermal Solutions in China, growth drivers in Electric Thermal Solutions, a refreshed view on Biopharma, and a review of concerns around returns on capital employed.
UBS identified Electric Thermal Solutions as offering the most overlooked potential in growth, margins and returns, while noting that market expectations for Steam Thermal Solutions and Watson-Marlow also appear too conservative.
The investment bank’s FY’26 adjusted operating profit forecast for Spirax sits 8% above consensus, with UBS expecting positive contributions from all divisions of the engineering group.
UBS cited sustainable growth potential not currently reflected in Spirax’s valuation as the key driver behind its rating upgrade to Buy.
In other recent news, Spirax Group PLC has reported its H1 2025 performance, which surpassed consensus estimates. The company achieved sales of GBP822 million and an adjusted EBIT of GBP159 million, exceeding expectations of GBP814 million in sales and GBP152 million in EBIT. In light of these results, CFRA has upgraded Spirax Group’s stock rating from Hold to Buy. The firm also raised its price target for the company’s stock to GBP80.00 from GBP64.00. CFRA cited improved operational resilience and enhanced earnings visibility as key factors for this upgrade. These developments reflect the company’s strong performance and positive outlook as assessed by analysts.
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