ASX industrials stock SGH Ltd (ASX: SGH) is in focus after the company delivered half-year results yesterday.
Following earnings results, the company saw its share price climb 3.5% higher.
For those unfamiliar, SGH is a leading Australian diversified operating and investment group with market leading businesses and investments in industrial services, energy and media sectors.
Image source: Getty Images
What did the company report?
In yesterday's results this ASX industrials stock reported:
- Revenue of $5.4 billion, down 2% from 1HY25
- EBIT of $844 million, flat year-on-year, up 22% on 2H FY25
- NPAT of $518 million, up 2% on the prior corresponding period
- EBITDA of $1.1 billion, up 1%
- Operating cash flow of $1.1 billion, up 32%
- Interim fully franked dividend of 32 cents per share, up 7%
Investors were seemingly pleased with the results, as the stock price climbed more than 3%.
It is now up an impressive 8.7% already in 2026.
For context, the S&P/ASX 200 Industrials (ASX: XNJ) index is up just 0.21% since the start of the year.
What is Bell Potter's updated outlook?
Following the results, the team at Bell Potter provided updated guidance on this ASX industrials stock.
Bell Potter said SGH's first-half FY26 result was slightly better than expected.
This was mainly due to stronger profits from its investments rather than its core businesses.
The company reported underlying EBIT (uEBIT) of $820 million, which was broadly in line with expectations.
The overall 4% "beat" came from higher-than-expected profits from equity-accounted investments, particularly Beach Energy Ltd (ASX: BPT) and Seven West Media Ltd (ASX: SWM)
Together these contributed $24 million more than forecast. Excluding this boost, the core result was largely as expected.
Other individual businesses under the SGH umbrella largely performed in line with expectations.
The company also declared a fully franked interim dividend of 32 cents per share, which was in line with expectations.
Price target increase
Based on this guidance, Bell Potter increased its price target to $56.00 (previously $51.80).
The broker also maintained its buy recommendation.
From yesterday's closing price of $50.91, this indicates an upside of 10%.
Our Target Price lifts to $56.00/sh (up from $51.80/sh) due to model roll-forward and a more optimistic medium-term outlook for Boral sales. We believe operating conditions are set to improve for Boral and Coates from cycle-lows in Infrastructure and residential construction markets.
With net leverage currently at multi-year lows, SGH has even greater financial flexibility to deliver accretive M&A, a major re-rate catalyst.
