Smiths Group: Resuming Coverage With GBX 2,030 Fair Value Estimate and Wide Economic Moat Rating

We resume coverage of Smiths Group with a fair value estimate of GBX 2,030 and a wide economic moat rating. We assign Smiths Group a Medium Uncertainty Rating and a Standard Capital Allocation Rating. Smiths Group is a collection of four distinct capital goods businesses that supply a range of mission-critical industrial equipment and associated aftermarket services. While serving customers in disparate market verticals—which include the oil & gas, aviation & defense industries as well as the general industrial sector—Smiths Group’s stable of global capital goods businesses are united by similar business models, engineering expertise, and leading market positions in the capital goods niches they serve. Smiths Group shares screen as undervalued, trading at a 15% discount to our valuation.