Even with the UK stock market near record highs, there are still plenty of terrific shares for investors to buy. And according to the investment bank Jefferies, the UK industrials sector is home to several terrific bargains right now.
So what UK stocks are experts recommending?
Seven professional stock picks
In order of market cap, here are the top picks from Jefferies’ team of professional analysts:
| Company | Market Cap | Target Price | Potential Return |
| IMI | £6.8bn | 3,185p | +15.6% |
| Spirax Group | £5.4bn | 8,715p | +23.4% |
| Rotork (LSE:ROR) | £2.6bn | 460p | +46.6% |
| Chemring | £1.5bn | 660p | +20.2% |
| Bodycote | £1.3bn | 920p | +26.4% |
| Volution Group | £1.2bn | 840p | +38.6% |
| Elementis | £871m | 210p | +36.5% |
Investing in industrials when the sector’s macroeconomic environment is challenging is definitely a contrarian move. But digging deeper into Jefferies’ thesis, they may be on to something.
A hidden opportunity?
The last few years have been tough for British manufacturers. Higher labour and energy costs have weighed heavily on profit margins. But in the last six months, there have been signs of a cyclical recovery.
The UK Manufacturing Purchasing Managers Index (PMI) has been steadily rising since May 2025. And as of February, it now stands at 51.7. As a quick crash course, the PMI measures whether or not an industry is expanding or contracting. And a value above 50 means growth has re-entered the manufacturing sector.
There are a number of forces at work here. But the two primary drivers are:
- Higher defence spending demand tailwinds.
- New efficiencies from investments into artificial intelligence (AI) and automation.
So while the sector as a whole is still far from thriving, Jefferies is placing a bet that the UK’s leading manufacturers are well positioned to re-expand profit margins and deliver steady compounding returns for shareholders.
Time to buy?
Given the deeply discounted valuations within the UK industrial sector, Jefferies’ share price targets are quite exciting. And as a quick calculation, £10,000 invested equally across these businesses could grow to £12,961 by this time next year.
However, like all investments, nothing’s guaranteed. While the UK Manufacturing PMI’s on an upward trend, that could soon reverse as another Minimum Wage hike comes into effect in April, along with surging energy costs due to the war in Iran.
There are also company-specific factors for investors to consider carefully. For example, Rotork’s currently caught in the crossfire of the Iran war. Saudi Aramco, ADNOC, and QatarEnergy have all drastically reduced oil & gas production due to the ongoing conflict on their doorstep.
The result? A sharp drop in demand for Rotork’s flow control instruments used throughout the Middle Eastern energy sector. With projects being delayed, the company’s facing some significant demand headwinds, which could derail its progress if the conflict turns into a protracted war.
Having said that, in the long run, the company may end up being a beneficiary once peace returns to the region. After all, damaged pipelines and production plants will need new valves and actuators to repair – something Rotork will be more than happy to supply.
With that in mind, I think Jefferies might be right to be bullish right now, and it’s why I think investors should think about taking a closer look at all the stocks in this industrial basket.
