Spirax: Trading Update Reveals Positive Signs for a Recovery; Shares Are Cheap

Shareholders in wide-moat Spirax will be happy with its brief third-quarter trading update, revealing organic sales growth across all three business segments year to date. While this isn’t the catalyst investors are looking for in a broader recovery, particularly across its Watson-Marlow business, which is the main driver behind the restoration of group profitability, it does suggest momentum is shifting favorably for the business. Full-year guidance is unchanged. Shares are trading 5% higher intraday, but still offer 30% upside to our GBX 9,650 fair value estimate, which we maintain.