As of June 2, 2025, Severfield PLC has a Discounted Cash Flow (DCF) derived fair value of $91.59 per share. With the current market price at $34.50, this represents a potential upside of 165.5%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $74.88 |
| DCF Fair Value (10-year) | $91.59 |
| Potential Upside (5-year) | 117.0% |
| Potential Upside (10-year) | 165.5% |
| Discount Rate (WACC) | 7.4% - 9.9% |
Revenue is projected to grow from $463 million in 03-2024 to $846 million by 03-2034, representing a compound annual growth rate of approximately 6.2%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 03-2024 | 463 | 6% |
| 03-2025 | 516 | 11% |
| 03-2026 | 530 | 3% |
| 03-2027 | 542 | 2% |
| 03-2028 | 585 | 8% |
| 03-2029 | 628 | 7% |
| 03-2030 | 659 | 5% |
| 03-2031 | 700 | 6% |
| 03-2032 | 742 | 6% |
| 03-2033 | 800 | 8% |
| 03-2034 | 846 | 6% |
Net profit margin is expected to improve from 3% in 03-2024 to 4% by 03-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 03-2024 | 16 | 3% |
| 03-2025 | 20 | 4% |
| 03-2026 | 21 | 4% |
| 03-2027 | 21 | 4% |
| 03-2028 | 23 | 4% |
| 03-2029 | 25 | 4% |
| 03-2030 | 26 | 4% |
| 03-2031 | 27 | 4% |
| 03-2032 | 29 | 4% |
| 03-2033 | 31 | 4% |
| 03-2034 | 33 | 4% |
with a 5-year average of $7 million. Projected CapEx is expected to maintain at approximately 2% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 03-2025 | 8 |
| 03-2026 | 8 |
| 03-2027 | 9 |
| 03-2028 | 10 |
| 03-2029 | 10 |
| 03-2030 | 10 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 74 |
| Days Inventory | 20 |
| Days Payables | 56 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 6M/2025 | 17 | 3 | 5 | 12 | (2) |
| 2026 | 36 | 6 | 9 | (6) | 27 |
| 2027 | 37 | 6 | 9 | 1 | 21 |
| 2028 | 40 | 6 | 10 | 9 | 15 |
| 2029 | 43 | 7 | 11 | 4 | 21 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 74.88 | 117.0% |
| 10-Year DCF (Growth) | 91.59 | 165.5% |
| 5-Year DCF (EBITDA) | 48.47 | 40.5% |
| 10-Year DCF (EBITDA) | 69.39 | 101.1% |
Is Severfield PLC (SFR.L) a buy or a sell? Severfield PLC is definitely a buy. Based on our DCF analysis, Severfield PLC (SFR.L) appears to be significantly undervalued with upside potential of 165.5%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $34.50.