ASX industrials stock SGH Ltd (ASX: SGH) has been attracting broker attention recently after the company's investor day last week.
SGH is a leading Australian diversified operating and investment Group with market leading businesses and investments in Industrial Services, Energy and Media sectors.
The company has seen its share price slip almost 12% year to date, however brokers are anticipating a recovery throughout the next 12 months.
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What did the company report at its investor day?
According to the release, FY26 EBIT growth is expected to be within the range of low to mid single-digit.
The company also reported HY26 EBIT up 22% on 2H FY25.
Bell Potter noted that the company also plans to generate $100m in benefits from AI initiatives over FY26–27.
The company also aims to grow earnings steadily over time, maintain strong returns on investments, and eventually increase its market value to $30bn and join the ASX50.
Management remains positive on long-term demand from Australian infrastructure spending, mining growth, ageing mining equipment needing maintenance, and stronger gas and LNG markets.
Other updates included a new property development joint venture for Boral, plans for better equipment utilisation at Coates, and continued focus on improving Boral's profit margins.
Bell Potter slightly lowered its earnings forecasts for SGH because it now expects weaker revenue growth and margins across some divisions.
Updated targets from Bell Potter
Based on this guidance, the team at Bell Potter lowered its price target to $50.00 (previously $56.00).
However, from yesterday's closing price of $41.30, this indicates roughly 21% upside.
We view SGH's market valuation as undemanding. SGH has articulated a robust medium and long-term valuation creation framework at its FY26 Investor Day, underpinned by reasonable operational targets. Any forthcoming M&A activity would likely be well received by the market.
It's worth noting that Bell Potter isn't the only broker with a positive outlook for this ASX industrials stock.
The team at Macquarie increased its price target on SGH shares to $50.40 following the investor day.
Macquarie said while macroeconomic conditions remained complex, SGH's execution remains strong, "and Boral likely continues to support the majority of near-term growth".
Additionally, RBC Capital Markets also recently released a report on SGH, with a price target of $47.
These targets all indicate an upside hovering around 20% for this ASX industrials stock.
