IMI (IMI) SHARES: 2025 OUTLOOK, PERFORMANCE, AND INSIGHTS

How did IMI shares perform in 2025?

Founded in 1862, IMI plc (LSE: IMI) has long maintained a steady position as one of the United Kingdom's leading engineering firms, specialising in fluid and motion control technologies. The company’s shares showed relatively stable progress throughout 2025, driven by solid operational performance, strategic acquisitions, and sustained demand from industrial automation and climate control markets.

IMI’s full-year 2025 financial results reflected a continuation of momentum initiated in 2024 following its strong pandemic recovery. Revenue rose by 6.4% year-on-year, reaching approximately £2.3 billion, supported by a healthy backlog and improving customer sentiment across industries. Earnings per share rose 8.1%, outpacing inflation and evidencing margin control and cost discipline.

Across its three main divisions—IMI Precision Engineering, IMI Critical Engineering, and IMI Hydronic Engineering—the most impressive gains were seen in its Hydronic segment, thanks to increasing regulatory pressures for energy efficiency and growing retrofitting projects in Europe. Precision Engineering also saw upticks in order inflows driven by robust automotive and packaging sectors, although near-term semiconductor shortages posed a minor drag.

Stock performance tracked broader sentiment. From January to December 2025, IMI shares appreciated circa 12%, outperforming the FTSE 250 index. The growth was partly underpinned by share buybacks worth £120 million carried out through April and October, alongside the maintenance of a solid dividend yield of approximately 3.2%.

In terms of institutional interest, investment from ESG-focused institutional funds lifted visibility. Analysts’ recommendations remained broadly positive, with HSBC and Barclays maintaining ‘Buy’ ratings in Q4 2025, citing order backlog and productivity programmes as key catalysts.

Key highlights from 2025:

• Revenue climbed to £2.3 billion (+6.4% YoY)
• EPS increased 8.1%
• Share price up 12% over the year
• Return on invested capital improved to 16.4%
• Strong demand in energy transition-related projects

Looking beyond the numbers, IMI’s integration of digital twins and AI-backed diagnostics in aftermarket services contributed to recurring revenue streams. Furthermore, the successful absorption of two bolt-on acquisitions in the US and Germany expanded IMI’s capacity and geographic footprint, diversifying its industrial automation portfolio.

Despite geopolitical uncertainties and ongoing inflationary pressures on raw materials, IMI showed resilience by leveraging firm supplier relationships and hedging strategies, avoiding significant cost overruns. Management flagged modest pricing power and volume upticks as positive contributors to performance stability throughout 2025.

In short, 2025 concluded as a year of quiet strength for IMI plc—solid, consistent, and focused on sustainable industrial solutions.

What are IMI’s growth drivers moving forward?

As 2026 approaches, IMI plc appears well-positioned to maintain its upward trajectory, building on strategic foundations laid in 2025. A number of core market trends, innovation priorities, and organisational realignments are primed to drive growth for the business, particularly within energy efficiency and industrial automation sectors.

1. The energy transition boom
Governments and private sectors across Europe and Asia are increasing capital expenditure on decarbonisation, efficient heating systems, and industrial emission reduction. IMI’s Hydronic Engineering division stands to benefit most, offering leading solutions in balancing, thermostatic controls, and smart valves. The net-zero agenda remains a secular tailwind, and several retrofit renovation programmes across residential and commercial buildings worldwide are providing long-cycle project pipelines.

2. Industrial automation and productivity gains
IMI Precision Engineering has been investing aggressively in AI-driven asset monitoring and predictive maintenance systems. The proliferation of smart factories and embedded control systems across sectors such as pharma, automotive, and packaging spurs demand for miniature control technologies—an area where IMI has deep technical strength.

3. Expansion into emerging markets
In 2025, IMI focused on increasing its footprint in high-growth geographies, including India, Southeast Asia, and parts of Latin America. Contracts associated with green hydrogen distribution and water purification in India alone surpassed £50 million in potential future bookings. These new growth vectors offer protection against slower demand in Europe.

4. Recurring service-led revenue streams
The company is pivoting toward a hybrid offering of capital equipment and post-sale service contracts. Advanced analytics are being used to personalise maintenance schedules and extend asset life cycles—transforming customer engagement and margin sustainability. Over 30% of 2025 revenue originated from services, up from 25% in 2023.

5. Leverage from digitalisation and R&D
IMI continues to digitalise its platform and supply chain ecosystems, enabling faster product iterations, cost reductions, and lower downtime for clients. In 2025, over £110 million was channelled toward research and innovation, with key focus areas including hydrogen-ready valves, AI integration, and decarbonising HVAC components.

Investor updates suggest IMI is on track to deliver:

• 5–7% annual revenue growth through FY2026
• Operating margin expansion of 40–60bps YoY
• Organic growth supplemented by selective acquisitions
• 25–30% of total revenue from climate-related projects by 2027

In addition, IMI’s culture of employee engagement and lean operations under its “One IMI” transformation agenda have led to higher returns on capital and lower overheads. Employee productivity metrics rose in 2025 due to broader automation and revised incentive programmes.

Collectively, these drivers reinforce IMI’s potential to continue its ascent and create premium shareholder value heading into 2026.

What risks and challenges lie ahead in 2026?

While IMI plc enters 2026 with momentum, investors must remain cautious around various external and internal risk factors that could influence its future performance. These challenges span macroeconomic uncertainties, supply chain stressors, market saturation in mature sectors, and technological disruption.

1. Macroeconomic headwinds
High interest rates across the UK and Europe, aimed at curbing inflation, pose a challenge to new capital spending by IMI’s industrial clients. Should central banks maintain or increase rate levels into mid-2026, project deferrals could begin to dent the company's order visibility, particularly in non-essential infrastructure segments.

2. Currency and commodity price volatility
With around 90% of revenue generated outside the United Kingdom, FX exposure remains a key risk. A strengthening pound, particularly against the euro and US dollar, could reduce the reported top line. Additionally, metals and electronic component costs remain volatile, despite company efforts to lock in favourable contracts. Prolonged price shocks could compress margins.

3. Dependence on M&A execution
IMI has underscored its growth thesis around bolt-on acquisitions, but this strategy carries integration, cultural, and cash flow risks. Failure to realise synergies or assimilate newly acquired operations—especially in complex geographies—could lead to write-offs or shareholder discontent in 2026.

4. Regulatory and political uncertainty
The upcoming UK general election, as well as ongoing trade negotiations post-Brexit with the EU, introduces unpredictability. Changes in import tariffs, environmental standards, or labour laws could shift IMI’s strategic execution, especially in cross-border supply chains and skilled labour access.

5. Technological disruption
Industrial automation is moving quickly, with major players such as Siemens and Schneider Electric investing in sensor-embedded, modular, and AI-native platforms that compete with IMI’s legacy equipment. To remain competitive, continuous R&D investment is essential—a balancing act against short-term profitability pressures.

6. ESG compliance and investor expectations
There is mounting scrutiny from ESG-focused institutional investors regarding IMI’s hydrogen readiness, Scope 3 emissions management, and diversity metrics. Non-compliance or perception gaps could affect future fund inflows and trigger governance activism.

Analyst risk ratings:

• JP Morgan – Moderately Positive, citing valuation ceilings
• Jefferies – Hold, referencing dollar headwind concerns
• UBS – Buy, but flags possible M&A risk amplification

On balance, while the forecast for IMI in 2026 appears positive, prudent investors should closely monitor input costs, acquisition metrics, FX hedging positions, and sector-specific regulatory updates. IMI’s resilience in 2025 builds investor confidence, but adaptability will be key to navigating the nuanced landscape of 2026 with success.