IMI PLC (LON:IMI) should benefit from a more supportive backdrop as it makes progress towards medium-term cost savings, says Credit Suisse, leading analysts there to upgrade their rating on the shares.

The Swiss investment bank rating was upped to ‘outperform’ from ‘neutral’ and the share price target hiked to 1,450p from 1,160p, following upgrades elsewhere in the City in recent months.  

Upside looks possible over and above what seems “cautious” near-term guidance, the analysts said, having seen supportive data for IMI’s Precision division.

Recent data points to an acceleration in the recovery towards the end of last year for IMI’s industrial automation sales, the number crunchers added, in contrast to guidance for Precision to see high-single-digit percentage growth declines after 3% growth in the third quarter.

“We expect Q420 growth to slow from Q320 due to less ventilator parts tailwinds but still see upside to H220 consensus.”

Furthermore, if management continue delivering against expectations this will be “an important foundation from which the stock can re-rate”.

The analysts added that “portfolio actions”, with the board reviewing various parts of the business since 2019, remain “the key to closing the valuation gap in the medium term”.