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On Tuesday, Deutsche Bank (ETR:DBKGn) analysts revised their outlook on Schneider Electric SE (EPA:SCHN:FP) (OTC:SBGSY), reducing the price target from EUR225.00 to EUR220.00 but maintaining a Hold rating on the stock. The adjustment follows Schneider Electric’s reported first-quarter revenues of €9,325 million, falling short of the consensus by 1.5%. The company experienced a slowdown in organic growth, which decreased to 7.4% in the first quarter of 2025, compared to 12.5% in the last quarter of 2024. This performance was below the market expectation of 8.9%.
The deceleration in growth was attributed to several factors, including weaker demand in residential buildings, postponed investment decisions by data center customers in Europe, and timing issues at AVEVA, a subsidiary of Schneider Electric. Despite the slower start to the year, Schneider Electric has confirmed its full-year guidance for organic revenue growth to be between 7% and 10%.
However, the company has adjusted its target margin range downwards by 50 basis points due to the impact of foreign exchange rates. In response to these developments, Deutsche Bank analysts have also reduced their earnings per share (EPS) forecasts for Schneider Electric by an average of 5% over the next three years.
The report from Deutsche Bank underlines the valuation rationale behind maintaining the Hold rating, even as the price target sees a modest reduction. Schneider Electric’s reaffirmation of its revenue growth guidance suggests a level of confidence in its ability to meet year-end goals despite the challenges faced in the first quarter.
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