Severfield: Buy Rating Backed by Strategic Refocus, Robust Order Book, and Credible New Management

Andrew Douglas, an analyst from Jefferies, has initiated a new Buy rating on Severfield (SFR).

Andrew Douglas has given his Buy rating due to a combination of factors that strengthen the investment case for Severfield. He views the closure of the Modular Solutions division as a positive strategic move, since this activity was too small, non-core, and unlikely to deliver the level of returns targeted by the new management team, freeing capital and focus for more attractive areas. He also highlights that management has reiterated its profit before tax and net debt expectations for FY26, which underpins confidence in the medium‑term financial outlook.
Furthermore, Douglas points to the recent, meaningful increase in the UK and EU order book, which has grown to £479m, supported in part by notable data centre project wins, indicating healthy demand and a robust pipeline. He notes that large-scale opportunities in the data centre segment and elsewhere in the region could further support growth. Finally, his positive stance is reinforced by the strong early execution and credibility of the new management team, from whom he expects a clearer long‑term growth strategy and initial FY27 guidance to act as additional catalysts for the shares.

According to TipRanks, Douglas is a 4-star analyst with an average return of 5.5% and a 60.29% success rate. Douglas covers the Industrials sector, focusing on stocks such as Senior plc, Avon Technologies, and Bodycote.