LONDON (ShareCast) - Analysts at broker Liberum have cut their rating for engineering group IMI from 'buy' to 'hold' on the back of a "challenging near-term outlook".
They predict that the stock will "tread water" in the near term and have slashed their target for the shares from 1,650p to 1,350p.

Last week, IMI released a third-quarter trading update showing that trading had softened since the half-year stage. Organic growth had slowed to just 1% in the four months to October from 3% in the first half.

Liberum has now lowered its profit forecasts for IMI over the next two years on the back of a "more muted" organic growth outlook, though it did note that the long-term drivers of the business are still intact.

"Despite self-help potential, ambitious management plans and potentially accretive M&A, weakening organic growth and flat margins through 2015 lead us to conclude that the shares will tread water in the short-term," said analysts Jack O'Brien and Ben Bourne.

The stock trades at 14.6 times estimated 2015 earnings.

IMI was trading 2.6% lower at 1,193p by 10:18 on Wednesday.

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