Analyst Andrew Douglas from Jefferies reiterated a Buy rating on Severfield and keeping the price target at p41.00.
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Andrew Douglas has given his Buy rating due to a combination of factors including Severfield’s resilient trading update and strong financial position. The company’s recent AGM Trading Update indicates that year-to-date trading aligns with expectations, and the order books have remained stable, with a slight increase in the Indian joint venture reaching a new record. Additionally, the management’s focus on cash generation and their description of the financial position as ‘good’ further supports this positive outlook.
Severfield’s strong market positions in the UK and EU, coupled with its broader and more differentiated offerings compared to peers, contribute to its attractiveness. The company’s technical capabilities and the potential value of its Indian joint venture, which the market may not fully recognize, are also significant factors. Despite some near-term challenges, the medium-term outlook for Severfield remains promising, making it an appealing recovery and growth story, which underpins the Buy rating.