Street Calls of the Week
Investing.com - BofA Securities upgraded Schneider Electric SE (EPA:SU), a prominent player in the electrical equipment industry with a market capitalization of $153 billion and annual revenue of $46.3 billion, from Neutral to Buy on Wednesday, raising its price target to EUR265.00 from EUR231.00.
The upgrade is based on three key factors, including Schneider’s exposure to structural tailwinds such as data centers, which represent 20% of the company’s sales, and the anticipated recovery of the European construction market in 2026. According to InvestingPro data, the company maintains a solid financial health score of 2.78 (GOOD), supported by robust revenue growth of 7.89%.
BofA Securities expects Schneider to deliver consistent high-single-digit organic growth from 2025 through 2027, outperforming most peers in the sector.
The firm also anticipates accelerating margin expansion beginning in the second half of 2025, driven by price tailwinds of approximately 1% annually, combined with strong volume and productivity benefits.
BofA Securities added Schneider Electric to its Europe 1 list, noting that despite further upgrades to the data center capital expenditure outlook in recent quarters, Schneider’s valuation has de-rated compared to other electrical peers, creating what it considers an attractive entry point. The stock currently trades at a P/E ratio of 30.5x and a Price/Book ratio of 4.8x, with InvestingPro’s Fair Value analysis suggesting the stock is slightly overvalued at current levels.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.