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1. Company Snapshot

1.a. Company Description

Renishaw plc, an engineering and scientific technology company, designs, manufactures, distributes, sells, and services metrology and healthcare products worldwide.The company offers co-ordinate measuring machine (CMM) products, machine tool probe and software, performance measurement systems, gauging systems, fixtures, and styli for touch probe systems; interferometric laser, magnetic, and optical encoders; additive manufacturing systems; plastics and metal vacuum casting machines; and mapping sensors.It also provides healthcare products, such as dental scanners, neurosurgical robots and accessories, neurosurgical planning software, drug delivery systems, Raman microscopes, craniomaxillofacial customized implants, analysers, and hybrid Raman systems.


In addition, the company offers asset financing and travel agency services.It serves the aerospace, agriculture, automotive, construction, consumer electronics, healthcare, power generation, resource exploration, energy, heavy, medical, and precision manufacturing industries, as well as scientific, research, and analysis industries.The company was incorporated in 1973 and is headquartered in Wotton-under-Edge, the United Kingdom.

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1.b. Last Insights on RSW

Renishaw plc's recent performance was positively driven by favorable market conditions and a quiet market that may indicate changing sentiment. Although there hasn't been a significant event driving the activity, the company's share price has gained 37% in the last three months. The absence of negative news and potential growth prospects outside the blue-chip sphere may have contributed to the positive trend. Additionally, investors are exploring smaller-cap stocks like Filtronic and others for untapped potential.

1.c. Company Highlights

2. Renishaw's FY 2025 Results: A Mixed Bag with Uncertain Outlook

Renishaw reported a decline in group revenue for FY 2025, with the company's industrial metrology market experiencing mixed conditions. The actual EPS came out at 0.52, missing estimates of 0.664. Revenue was impacted by weakness in automotive and softness in Germany and Taiwan, while the systems business showed strength. The company's margins were affected, but it has implemented price increases to offset the costs of tariffs, including the increased Section 232 tariffs on steel and aluminum, which are expected to have a 1% impact on revenue.

Publication Date: Oct -26

📋 Highlights
  • Group Revenue Decline: Overall group revenue decreased in FY 2025, despite strong order book growth in additive manufacturing.
  • Tariff Impact: Increased US tariffs on steel and aluminum will reduce revenue by 1% (GBP 9 million) in FY 2026.
  • Cash Reserves: Renishaw holds GBP 300 million in cash, with potential deployment via M&A, buybacks, or dividends under active board review.
  • Cost Management: GBP 20 million labor savings program is on track, with manageable cost inflation expected in FY 2026.
  • Capital Expenditure: Annual CapEx is projected at GBP 40 million for FY 2026 and beyond, following major expansion projects.

Segment Performance

In additive manufacturing, revenue was down in FY '25, but the order book finished the year strongly. The company sees opportunities in China, particularly in entry-level markets, and expects to develop a strategy to exploit these. Consumer electronics was an area of strength for industrial metrology. Automotive, representing around 13% of revenue, is contracting, while defense, accounting for around 5%, is growing. As William Lee noted, "We're seeing opportunities in defense, particularly with inductive encoders."

New Product Launches and Cost Management

New product launches, including Equator-X, the dual-laser RenAM machine, and ASTRiA inductive encoders, are performing well and are expected to drive long-term growth. The company expects underlying cost inflation in FY '26 to be manageable, with a GBP 20 million labor savings program on track. Renishaw also expects to see benefits from its global ERP program and other productivity initiatives.

Cash Deployment and Capital Expenditure

The company has nearly GBP 300 million in cash and is considering options for deployment, including M&A, special dividend, or buyback. Allen Roberts stated, "We're looking at around GBP 40 million for the current year in terms of CapEx, and similarly for the next couple of years." The major spend on expansion has taken place, so the company is well-prepared for growth.

Valuation and Outlook

With a P/E Ratio of 31.87 and an EV/EBITDA of 19.4, the market is pricing in a certain level of growth. Analysts estimate next year's revenue growth at 5.0%. The company's ROE is 9.19%, and ROIC is 7.92%. The Dividend Yield is 1.52%, and the Free Cash Flow Yield is 3.81%. Given the uncertain outlook and the current valuation multiples, investors will be watching the company's progress in executing its strategy and managing costs.

3. NewsRoom

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Why Analysts See Renishaw Differently After Margin Gains And Higher Price Targets

Dec -04

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Why Analysts See Shifting Fortunes for Renishaw Amid Margin Gains and Mixed Signals

Nov -19

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Why The Narrative Around Renishaw Is Shifting Following Analyst Upgrades and New Developments

Nov -04

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Renishaw plc (LON:RSW) Goes Ex-Dividend Soon

Oct -28

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Looking at the Narrative for Renishaw After Recent Analyst Upgrades and Forecast Shifts

Oct -06

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Renishaw's (LON:RSW) Upcoming Dividend Will Be Larger Than Last Year's

Oct -02

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Renishaw Full Year 2025 Earnings: EPS Misses Expectations

Sep -20

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Form 8.3 - IQE Plc

Sep -09

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.56%)

6. Segments

Manufacturing Technologies

Expected Growth: 4.5%

Renishaw plc's Manufacturing Technologies segment growth of 4.5% is driven by increasing adoption of additive manufacturing, rising demand for precision engineering, and growing need for process control and inspection solutions in industries such as aerospace, automotive, and healthcare.

Analytical Instruments and Medical Devices

Expected Growth: 5.5%

Renishaw's 5.5% growth in Analytical Instruments and Medical Devices is driven by increasing demand for precision engineering and healthcare technology. Strong R&D investments, expanding applications in 3D printing and neurosurgery, and growing adoption in emerging markets contribute to this growth. Additionally, the company's diversified product portfolio and strategic acquisitions support its expansion in these segments.

7. Detailed Products

Additive Manufacturing Systems

Renishaw's additive manufacturing systems are designed to produce complex parts and products with high accuracy and precision.

Coordinate Measuring Machines (CMMs)

Renishaw's CMMs are used for precision measurement and inspection of manufactured parts and assemblies.

Machine Tool Probe Systems

Renishaw's machine tool probe systems are used to measure and inspect parts during the manufacturing process.

Raman Spectroscopy Systems

Renishaw's Raman spectroscopy systems are used for chemical analysis and material identification.

Encoder Systems

Renishaw's encoder systems are used to measure position, angle, and displacement in industrial and scientific applications.

Laser Calibration Systems

Renishaw's laser calibration systems are used to calibrate and align machine tools and CMMs.

Neurological Products

Renishaw's neurological products are used in neurosurgery and neurology applications.

8. Renishaw plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Renishaw plc's products are highly specialized and customized, making it difficult for substitutes to emerge. However, the company's reliance on a few key customers and the increasing trend of additive manufacturing could pose a threat.

Bargaining Power Of Customers

Renishaw plc's customers, such as aerospace and automotive companies, have significant bargaining power due to their large size and purchasing power. This could lead to pressure on prices and margins.

Bargaining Power Of Suppliers

Renishaw plc's suppliers are relatively small and specialized, giving the company significant bargaining power. This allows Renishaw to negotiate favorable prices and terms.

Threat Of New Entrants

The high barriers to entry in Renishaw plc's markets, including significant capital expenditures and specialized expertise, make it difficult for new entrants to emerge.

Intensity Of Rivalry

The markets in which Renishaw plc operates are highly competitive, with several established players. However, the company's strong brand reputation and differentiated products help to mitigate the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 1.46%
Debt Cost 6.31%
Equity Weight 98.54%
Equity Cost 7.56%
WACC 7.54%
Leverage 1.49%

11. Quality Control: Renishaw plc passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
TE Connectivity

A-Score: 5.5/10

Value: 1.8

Growth: 6.6

Quality: 6.8

Yield: 2.5

Momentum: 8.5

Volatility: 7.0

1-Year Total Return ->

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Jabil

A-Score: 4.9/10

Value: 3.5

Growth: 6.7

Quality: 4.6

Yield: 0.0

Momentum: 9.5

Volatility: 5.3

1-Year Total Return ->

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Inficon

A-Score: 4.4/10

Value: 0.9

Growth: 6.8

Quality: 7.6

Yield: 4.4

Momentum: 2.0

Volatility: 4.7

1-Year Total Return ->

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Renishaw

A-Score: 4.3/10

Value: 2.4

Growth: 4.7

Quality: 6.8

Yield: 3.8

Momentum: 5.0

Volatility: 3.3

1-Year Total Return ->

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Spectris

A-Score: 3.8/10

Value: 1.4

Growth: 3.1

Quality: 4.3

Yield: 3.8

Momentum: 9.5

Volatility: 0.7

1-Year Total Return ->

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Stock-Card
Comet Holding

A-Score: 2.5/10

Value: 1.3

Growth: 3.8

Quality: 6.1

Yield: 1.2

Momentum: 1.0

Volatility: 1.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

36.4$

Current Price

36.4$

Potential

-0.00%

Expected Cash-Flows