Deutsche Bank downgrades Smiths to 'hold'

The bank reduced its EBITA assumptions for the company by 3% for both 2019 and 2020 and its earnings per share forecasts by 5% and 4%.

"Following a change of management in 2015, a renewed strategy, increased investment and portfolio rationalisation there was a view that Smiths was evolving. While this is still the case in certain respects, it has relapsed into the earnings downgrade cycle that was prevalent 2012-2016," DB said.

Smiths said last week that it returned to growth last year as underlying revenue increased but currency swings and reclassification of costs sent reported annual profit down 8%.

Underlying revenue rose 2% to £3.2bn in the year to the end of July though reported revenue fell 2%. Reported operating profit fell to £544m from £589m.

At 1315 BST, the shares were flat at 1,501p.