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Smiths Group
(OTC:SMGZY)
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Rating:62Neutral
Price Target:
$39.00
▲(9.98% Upside)
Action:Reiterated
Date:09/24/26
Overall score reflects (1) mixed financial performance—revenue decline and sharply weaker free cash flow/cash conversion versus earnings are the main drags despite steady operating margins and manageable leverage; (2) supportive technical momentum with price above key moving averages and a positive MACD; (3) valuation pressure from a high P/E with only a modest dividend yield; and (4) a notably positive earnings call with constructive FY27 growth and margin guidance, partially offset by geopolitical and end-market headwinds.
Positive Factors
Recurring revenue and customer visibility
A large aftermarket and contracted-revenue base supports repeat business, customer retention and better visibility than purely project-based sales. This installed-base exposure can help stabilize demand, sustain service economics and reinforce competitive positioning across the planning horizon.
Negative Factors
Recent revenue contraction
The latest annual revenue decline weakens the evidence of consistent top-line momentum and can reduce operating leverage if fixed costs do not adjust quickly. Although some businesses are growing, the group must overcome uneven end-market demand to establish a more durable growth trajectory.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring revenue and customer visibility
A large aftermarket and contracted-revenue base supports repeat business, customer retention and better visibility than purely project-based sales. This installed-base exposure can help stabilize demand, sustain service economics and reinforce competitive positioning across the planning horizon.
Read all positive factors
Smiths Group (SMGZY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.90B
Dividend Yield1.71%
Average Volume (3M)15.37K
Price to Earnings (P/E)4.3
Beta (1Y)0.61
Revenue Growth-31.31%
EPS Growth7.86%
CountryUS
Employees10,435
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)6.21
Shares Outstanding275,617,280
10 Day Avg. Volume1,872
30 Day Avg. Volume15,372
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)3.24
Price to Sales (P/S)4.40
P/FCF Ratio48.11
Enterprise Value/Market Cap0.87
Enterprise Value/Revenue4.51
Enterprise Value/Gross Profit11.31
Enterprise Value/Ebitda22.88
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.5
Revenue Forecast (FY)$2.73B
Smiths Group Business Overview & Revenue Model
Company Description
Smiths Group plc is a global technology enterprise, delivering specialized solutions to a wide array of markets, including medical technology, defense and security, industrial manufacturing, energy, and aerospace. The company's operations are stru...
How the Company Makes Money
Smiths Group makes money primarily by selling products, systems, and services through its four operating divisions. (1) John Crane generates revenue from mechanical seals, seal support systems, couplings, filtration and other rotating-equipment so...
Smiths Group Earnings Call Summary
Earnings Call Date:Sep 22, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Mar 23, 2027
Earnings Call Sentiment Positive
The call was strongly positive overall. Management highlighted successful portfolio transformation, resilient fiscal year 2026 financial performance, strong cash generation, substantial shareholder returns, favorable Aerospace and DRC momentum, operational savings and clear fiscal year 2027 growth and margin guidance. These positives outweighed the stated challenges from Middle East disruption, weak U.S. residential construction, Thermal Solutions declines, tariffs, working capital effects and higher tax and finance costs.Positive Updates
Portfolio Transformation Completed
Smiths completed the sales of Smiths Interconnect and Smiths Detection at very good prices, crystallizing GBP 3.3 billion of enterprise value and repositioning the company as a focused premium industrial engineering company.
Negative Updates
Challenging External Market Conditions
Fiscal year 2026 performance was affected by significant disruption from the conflict in the Middle East, ongoing weakness in U.S. residential construction, tariffs and lower volumes.
Read all updates
Q4-2026 Updates
Positive
Negative
Portfolio Transformation Completed
Smiths completed the sales of Smiths Interconnect and Smiths Detection at very good prices, crystallizing GBP 3.3 billion of enterprise value and repositioning the company as a focused premium industrial engineering company.
Read all positive updates
Company Guidance
For fiscal year ’27, Smiths is guiding to organic revenue growth of around 4%, headline operating profit margin of approximately 21%, entering its medium-term target range of 21% to 23%, and operating cash conversion in the low 90s range; John Crane is expected to be weighted towards the second half, with continued Middle East disruption during the first half, while Flex-Tek growth is expected to be weighted towards the first half, with a continuation of the subdued U.S. residential construction market, a continuing strong performance in Aerospace, a return to growth in Thermal Solutions and a positive organic contribution from fast growth in DRC, and tariffs are expected to be relatively neutral to us in fiscal year ’27. The company has strong conviction in more quickly delivering its 5% to 7% organic revenue growth over the medium term and underpinning its 21% to 23% operating profit margin target.Smiths Group Financial Statement Overview
Summary
Income Statement
56
Neutral
Balance Sheet
68
Positive
Cash Flow
49
Neutral
| Breakdown | Jul 2026 | Jul 2025 | Jul 2024 | Jul 2023 | Jul 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.90B | 2.92B | 3.13B | 3.04B | 2.57B |
| Gross Profit | 756.68M | 410.00M | 1.17B | 1.12B | 961.00M |
| EBITDA | 376.38M | 566.36M | 580.00M | 580.00M | 287.00M |
| Net Income | 1.93B | 292.00M | 250.00M | 231.00M | 1.03B |
Balance Sheet | |||||
| Total Assets | 4.83B | 4.01B | 4.23B | 4.36B | 5.22B |
| Cash, Cash Equivalents and Short-Term Investments | 2.95B | 195.00M | 459.00M | 285.00M | 1.06B |
| Total Debt | 1.19B | 667.00M | 659.00M | 654.00M | 1.17B |
| Total Liabilities | 2.23B | 1.95B | 1.98B | 1.95B | 2.50B |
| Stockholders Equity | 2.58B | 2.04B | 2.23B | 2.38B | 2.70B |
Cash Flow | |||||
| Free Cash Flow | 173.49M | 384.00M | 332.00M | 212.00M | 191.00M |
| Operating Cash Flow | 236.22M | 456.00M | 418.00M | 293.00M | 279.00M |
| Investing Cash Flow | 2.95B | -160.00M | 39.00M | -108.00M | 1.25B |
| Financing Cash Flow | -498.90M | -517.00M | -269.00M | -945.00M | -985.00M |
Smiths Group Technical Analysis
Positive
35.46
Price Trends
35.35
Positive
34.82
Positive
34.11
Positive
Market Momentum
0.11
Negative
53.63
Neutral
90.22
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SMGZY, the sentiment is Positive. The current price of 35.46 is below the 20-day moving average (MA) of 35.81, above the 50-day MA of 35.35, and above the 200-day MA of 34.11, indicating a bullish trend. The MACD of 0.11 indicates Negative momentum. The RSI at 53.63 is Neutral, neither overbought nor oversold. The STOCH value of 90.22 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SMGZY.
Smiths Group Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $31.06B | 22.42 | 13.53% | 0.10% | 7.96% | 161.68% | |
75 Outperform | $17.75B | 38.77 | 10.35% | 0.76% | 28.07% | -19.95% | |
73 Outperform | $17.18B | 32.39 | 13.31% | 1.24% | 6.93% | 14.08% | |
70 Outperform | $1.05B | 15.50 | 37.18% | ― | 13.17% | -38.92% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | $9.90B | 4.29 | 92.97% | 1.71% | -31.31% | 7.86% | |
61 Neutral | $10.02B | 39.51 | 11.35% | 1.10% | 0.21% | -42.26% |
* Industrials Sector Average
SMGZY
Smiths Group
36.13
3.64
11.20%
FLS
Flowserve
79.01
11.56
17.14%
IEX
IDEX
233.84
64.70
38.26%
ITT
ITT
198.50
14.88
8.10%
PSIX
Power Solutions
45.73
-39.89
-46.59%
IR
Ingersoll Rand
80.05
3.80
4.98%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.