Smiths Group: Detection to Drive Growth, Says Analyst

Goldman Sachs reiterated its positive outlook on Smiths Group (LON: SMIN) in a note earlier this week, highlighting the company’s Detection business as a key driver of future growth. 

The bank’s analysts expect the division to outperform consensus estimates, with adjusted EBIT forecasts for FY25 and FY26 sitting approximately 2% and 5% above market expectations.

Goldman Sachs believes that rising defence spending and the ongoing upgrade cycle for CTiX scanners will provide a solid foundation for continued sales growth at the British engineering firm. 

“Higher defence spending and ongoing CTiX upgrades will support continued sales growth, allowing for margin expansion not fully appreciated by consensus,” the analysts wrote.

In addition to short-term growth drivers, the investment bank also believes there are longer-term technological advancements that could further strengthen Smiths Group’s Detection business. 

Specifically, the bank highlighted X-ray diffraction and chemical detection as two R&D-led product categories that could sustain growth momentum in the future.

The firm maintains a “Buy” rating on Smiths Group, reinforcing confidence in the company’s ability to capitalise on both immediate market trends and longer-term innovation in security and detection technologies.

On Tuesday, Smiths Group saw its share price drop over 2% after it said it was managing a cybersecurity incident that involved unauthorised access to its systems,