Seven Group Holdings（SVW.AU）Industrial Services momentum to support HSD EBIT growth in FY25. Buy

Investment Rating - The report assigns a "Buy" rating for Seven Group Holdings (SGH) with a 12-month price target of A$45.00, up from A$43.00 [6][5]. Core Insights - Seven Group Holdings delivered a solid FY24 result with EBIT growth of +20%, exceeding guidance for "mid to high teen" percent growth, driven by a strong performance in the Industrial Services segment [2][3]. - The company is guiding for high single-digit (HSD) EBIT growth in FY25, aligning with estimates for +8% growth, supported by robust demand across key operating units [3][4]. - The stock is trading at a forward P/E of 17x, representing a c.20% discount to the ASX200 Industrials (excluding financials) [4][14]. Financial Performance - FY24 EBIT growth was primarily driven by the Industrial Services segment, which achieved +28% EBIT growth, with WesTrac, Coates, and Boral showing strong operating performances [2][3]. - Operating cash flow for FY24 was reported at A$808 million, reflecting an 11% increase compared to UBS estimates, with leverage at 2.2x at year-end [2][4]. - The report forecasts FY25 EBIT growth of +11% for WesTrac, +2% for Coates, and +6% for Boral, supported by a robust infrastructure and construction pipeline [3][16]. Valuation Metrics - The report indicates a 3-year EBIT CAGR of 7% for SGH, with strong operating cash flows aiding further deleveraging [4]. - The SOTP-based price target was adjusted to A$45.00 based on mark-to-market adjustments, with slight reductions in FY25/26 EPS forecasts by -4% and -2% respectively [5][4]. - Key financial metrics include a market cap of A$15.7 billion (US$10.4 billion) and an average daily trading volume of 611,000 shares [6][4].