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Investing.com - Jefferies upgraded Legrand SA (EPA:LR) from Underperform to Buy, significantly raising its price target to EUR167.00 from EUR86.00. The stock has shown remarkable momentum, with a 60% price return over the past six months and is currently trading near its 52-week high, according to InvestingPro data.
The upgrade reflects Legrand’s strategic positioning in the data center business, which the firm has developed through disciplined mergers and acquisitions. Jefferies highlighted the company’s strong alignment with hyperscalers procurement and approximately 80% exposure to recurring white space business. The company maintains impressive gross profit margins of 51.28% and has demonstrated solid revenue growth of 10.57% over the last twelve months.
Jefferies projects Legrand’s data center share will reach 36% of revenue by FY’30, representing a substantial growth opportunity. Meanwhile, about 60% of Legrand’s non-data center exposure remains approximately mid-teens below FY’19 volumes, suggesting recovery potential.
Despite these growth prospects, Jefferies notes that Legrand shares currently trade barely above their through-cycle level, indicating potential undervaluation. The firm’s earnings estimates for Legrand are 8% ahead of consensus for 2026/27.
Jefferies forecasts approximately 25% earnings uplift for Legrand by FY’30, supporting the significant price target increase and the upgrade to Buy rating.
In other recent news, Legrand reported second-quarter results that surpassed analyst expectations, showcasing a robust financial performance. The company’s sales were 5% higher than consensus estimates, while operating profit exceeded expectations by 8%, leading to an operating margin of 21.7%, 90 basis points above forecasts. In acquisition news, Legrand has signed a definitive agreement to acquire Avtron Power Solutions, a provider of load banks and power quality solutions, expected to generate nearly $350 million in revenue by 2025. Additionally, Legrand is set to acquire a 60.09% stake in Cogelec, an access control systems specialist, at €29 per share.
In terms of analyst ratings, Kepler Cheuvreux downgraded Legrand’s stock from Buy to Hold, citing valuation concerns, although they raised the price target to EUR152.00 from EUR142.00. Despite the downgrade, the firm acknowledged Legrand’s high-quality attributes within the capital goods sector. These developments reflect Legrand’s strategic growth initiatives and financial achievements.
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