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Investing.com - Bernstein SocGen Group lowered its price target on Schneider Electric (EPA:SCHN) SE (EPA:SU) (OTC:SBGSY) stock to EUR275.00 from EUR290.00 while maintaining an Outperform rating. According to InvestingPro data, Schneider Electric, currently valued at $149 billion, appears slightly overvalued based on its Fair Value analysis.
The firm adjusted its outlook primarily due to a weaker USD since the start of the year and slightly lower expectations for Western Europe Energy Management, while retaining estimates and organic growth projections for other regions.
Bernstein SocGen also noted an increase in interest expense forecasts for the current year, contributing to the price target reduction.
The analyst highlighted Schneider’s position as a pure play electrical and automation company with approximately 80% of sales exposed to electrification and 20% to industrial automation, contrasting with Eaton (NYSE:ETN)’s more diversified portfolio that includes aerospace (15%) and automotive (14%) segments.
Geographically, the firm pointed out that Eaton has twice the exposure to North America compared to Schneider, while Schneider maintains double the exposure to markets outside Europe and North America.
In other recent news, Schneider Electric has reported significant financial performance improvements. Moody’s upgraded Schneider Electric’s long-term issuer rating to A2 from A3, citing robust organic growth, improving margins, and strong cash generation. The company achieved an 18.3% EBITA margin in 2024, up from 14.7% in 2019, and expects further margin improvements in 2025. Schneider Electric generated €1.7 billion in free cash flow after dividends in 2024 and reduced its debt/EBITDA ratio to 2.2x. Additionally, Citi upgraded Schneider Electric’s stock rating from Neutral to Buy, with a revised price target of €245. This upgrade reflects a positive market valuation shift and an attractive long-term outlook, despite a conservative medium-term growth forecast. Citi’s analysis also indicates limited direct tariff risk and anticipates positive organic sales growth in the coming years. These developments underscore Schneider Electric’s strengthened business profile and potential for continued growth.
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