Cyclical rather than structural weakness has created a buying opportunity in wide-moat Spirax, presenting more than 60% upside from current levels. Analyzing fiscal 2024 results between the first and second halves confirms that the business is on track to achieve 250 basis points of EBIT margin expansion in the medium term, driven by a recovery in biopharma end markets. This recovery supports our projected 9% EPS compound annual growth rate through 2028. The shares are currently trading at 24 times depressed earnings, which is conservative for a company that has historically grown at approximately twice the rate of global industrial production and possesses a strong competitive moat. Additionally, valuation multiples are significantly below their long-term average.
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