Broker tips: IMI, 888 Holdings

Analyst at Berenberg raised their target price on flow control specialist IMI from 995.0p to 1,485.0p, stating the group was "quick off the mark".

Berenberg said IMI had continued to go from "strength to strength" since it took a more positive stance on the stock in September 2020, with the positive momentum seen at the tail end of 2020 continuing into the first quarter of 2021.

IMI reported an 8% year-on-year organic revenue growth for the quarter, with an acceleration of cost savings and an upgrade to full-year guidance at this relatively early stage.

The German bank noted that IMI management had also taken the opportunity to raise its sustainable margin guidance to 18-20%, a level not seen since 2013, and announce a £200.0m share buyback.

"We are impressed with how IMI has evolved over the past 18 months, but retain our 'hold' rating and reiterate our preference for Rotork in the flow control space," said Berenberg.

Canaccord Genuity has upped its price target on 888 Holdings after the gaming group reported a strong set of first-quarter numbers.

The bank, which retained its 'buy' recommendation on the FTSE 250-listed firm, increased its target price on the stock to 475.0p from 420.0p and also upped its full-year forecasts.

Canaccord said: "888 has entered the 2021 full year with positive momentum and a strong suite of new products for its growing global user base. [The] first-quarter update confirms an impressive start to 2021.

"We upgrade our forecasts by around 5%-6%, and continue to believe the outlook for 888 is exciting. With broad geographic exposure, a strong debt-free balance sheet, no legacy retail exposure and proprietary technology platforms across all major product verticals, 888 looks well placed for further growth."

The bank increased also its forecast for full-year adjusted earnings before interest, tax, depreciation and amortisation by 5% to $155.0m

Canaccord concluded: "Despite the shares rising 51% in the year-to-date, we continue to believe that the valuation remains compelling."