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Investing.com - Kepler Cheuvreux downgraded Legrand SA (EPA:LR) stock rating from Buy to Hold while raising its price target to EUR152.00 from EUR142.00. The stock has shown remarkable momentum, with a 59% return over the past six months and currently trades near its 52-week high of $33.77.
The downgrade comes despite the research firm’s recognition of Legrand’s high-quality characteristics within the capital goods sector, citing concerns that these qualities are now fully reflected in the share price. According to InvestingPro analysis, the stock appears fairly valued, with a P/E ratio of 30.1x and impressive gross profit margins of 51.3%.
Kepler Cheuvreux noted that current consensus expectations for Legrand’s revenue growth and profitability in 2025 exceed the company’s own guidance, creating a situation where management would need to upgrade forecasts during the upcoming Q3 results to meet market expectations.
The firm identified datacenter infrastructure as Legrand’s primary growth driver, while pointing out that core residential markets remain weak, though with improving lead indicators.
Legrand is scheduled to release its third-quarter results on November 6, 2025, at which point investors will see whether management provides the guidance upgrades that the market appears to be anticipating.
In other recent news, Legrand reported second-quarter results that exceeded analyst expectations, highlighting strong performance in sales and operating profit. The company’s sales were 5% above consensus, and its operating profit surpassed expectations by 8%, resulting in an operating margin of 21.7%, which was 90 basis points higher than anticipated. Following these results, Legrand raised its margin guidance, reflecting confidence in its financial outlook. Additionally, Legrand has signed a share purchase agreement to acquire a 60.09% controlling stake in Cogelec. This acquisition involves purchasing all shares of Cogelec Développement at €29 per share, giving Legrand 78.39% of voting rights. These developments underscore Legrand’s strategic expansion and robust financial performance.
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