Smiths Group (SMGZY) AI Stock Analysis

Smiths Group

(Other OTC:SMGZY)

Select Model

Rating:72Outperform

Price Target:$41.00▲(13.48% Upside)

Action:upgraded

Date:09/24/26

Strongly positive earnings call with optimistic guidance and portfolio transformation success are the primary drivers, supported by balance sheet stability; tempered by recent revenue softness and premium valuation.

Positive Factors

Recurring revenue and customer visibilityA 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 contractionThe 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.

Smiths Group (SMGZY) vs. SPDR S&P 500 ETF (SPY)

Market Cap: $10.01B
Dividend Yield: 1.80%
Average Volume (3M): 30.73K
Price to Earnings (P/E): 4.3
Beta (1Y): 0.61
Revenue Growth: -31.31%
EPS Growth: 7.86%
Country: US
Employees: 10,435
Sector: Industrials
Sector Strength: 63
Industry: Industrial - Machinery

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 structu...

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 solut...

Smiths Group Earnings Call Summary

Earnings Call Date:Sep 21, 2026(Q4-2026)|% Change Since:5.57%|Next Earnings Date:Mar 22, 2027

Earnings Call SentimentPositive

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.

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

Mixed performance: strong balance sheet (score 79) with moderate leverage and high ROE, offset by revenue declines and cash flow volatility (income statement 68, cash flow 62).

Income Statement

68Positive

Balance Sheet

79Positive

Cash Flow

62Positive

Financial statement breakdown
Breakdown	TTM	Jul 2026	Jul 2025	Jul 2024	Jul 2023	Jul 2022
Income Statement
Total Revenue	1.91B	1.90B	2.92B	3.13B	3.04B	2.57B
Gross Profit	759.60M	756.68M	410.00M	1.17B	1.12B	961.00M
EBITDA	375.49M	376.38M	566.36M	580.00M	580.00M	287.00M
Net Income	1.95B	1.93B	292.00M	250.00M	231.00M	1.03B
Balance Sheet
Total Assets	4.83B	4.83B	4.01B	4.23B	4.36B	5.22B
Cash, Cash Equivalents and Short-Term Investments	2.95B	2.95B	195.00M	459.00M	285.00M	1.06B
Total Debt	1.19B	1.19B	667.00M	659.00M	654.00M	1.17B
Total Liabilities	2.23B	2.23B	1.95B	1.98B	1.95B	2.50B
Stockholders Equity	2.58B	2.58B	2.04B	2.23B	2.38B	2.70B
Cash Flow
Free Cash Flow	174.30M	173.49M	384.00M	332.00M	212.00M	191.00M
Operating Cash Flow	237.36M	236.22M	456.00M	418.00M	293.00M	279.00M
Investing Cash Flow	2.97B	2.95B	-160.00M	39.00M	-108.00M	1.25B
Financing Cash Flow	-503.83M	-498.90M	-517.00M	-269.00M	-945.00M	-985.00M

Smiths Group Technical Analysis

Technical Analysis SentimentPositive

Last Price36.13

Price Trends

50DMA35.35Positive

100DMA34.82Positive

200DMA34.11Positive

Market Momentum

MACD0.11Negative

RSI53.63Neutral

STOCH90.22Negative

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 36.13 is above 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

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

SMGZY against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IR	85Outperform	$31.06B	22.42	13.53%	0.10%	7.96%	161.68%
IEX	79Outperform	$17.18B	32.39	13.31%	1.24%	6.93%	14.08%
ITT	75Outperform	$17.75B	38.77	10.35%	0.76%	28.07%	-19.95%
PSIX	72Outperform	$1.05B	15.50	37.18%	―	13.17%	-38.92%
SMGZY	72Outperform	$9.90B	4.29	92.97%	1.80%	-31.31%	7.86%
Sector *	63Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
FLS	63Neutral	$10.02B	39.51	11.35%	1.10%	0.21%	-42.26%

* Industrials Sector Average

Performance Comparison

SMGZY and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
SMGZY	Smiths Group	36.13	3.41	10.43%
FLS	Flowserve	79.01	8.00	11.27%
IEX	Idex Corporation	233.84	67.87	40.89%
ITT	ITT Corporation	198.50	14.41	7.83%
PSIX	Power Solutions International	45.73	-43.34	-48.66%
IR	Ingersoll Rand Inc.	80.05	4.13	5.43%

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.

Date of analysis: Sep 24, 2026

Smiths Group AI Stock Analysis