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On Wednesday, JPMorgan resumed coverage on Prysmian SpA (PRY:IM) (OTC: PRYMY) shares, a leading manufacturer of cables and systems for energy and telecommunications, with an Overweight rating. The firm significantly increased its price target for Prysmian shares to EUR71.00, up from the previous target of EUR55.00.
The revised price target comes after a period during which the firm had restricted its coverage of Prysmian. JPMorgan's new price target is set with a December 2025 horizon. The adjustment reflects a positive outlook on the company's recent strategic moves, including the acquisition of Encore Wire (NASDAQ:WIRE), a convertible bond conversion, and share buybacks.
These strategic developments have prompted JPMorgan to raise its adjusted earnings per share (EPS) forecasts for Prysmian by 11%, 19%, and 22% for the fiscal years 2024, 2025, and 2026, respectively.
The firm believes that Prysmian's acquisition of Encore Wire enhances its product offerings and positions the company to better serve its U.S. customers with a comprehensive range of cable solutions.
The North American market is viewed as a key growth area for Prysmian, and the firm notes that Prysmian is now among the few in the sector where the majority of group earnings originate from North America. This strategic positioning is expected to lead to market share gains in the region.
JPMorgan's December 2025 price target is based on a 12 times enterprise value to earnings before interest, taxes, and amortization (EV/EBITA) multiple applied to the firm's projected 2026 financial figures for Prysmian. The Overweight rating suggests that JPMorgan views Prysmian shares as a favorable investment relative to the market or sector average.
In other recent news, Prysmian SpA has been spotlighted by Barclays for its robust margin and risk profile, particularly in the arena of high-voltage capacities. Barclays has subsequently raised its share price target for the company from EUR58.00 to EUR63.00, while maintaining an Overweight rating on the stock.
This indicates the firm's positive outlook on Prysmian's performance. Prysmian's medium-voltage margin advantage, which is linked to favorable geographical exposure, is expected to be further enhanced by increased grid capital expenditure.
Additionally, the current surge in copper prices could increase the appeal of Prysmian's low-voltage exposure through its Encore product line. Barclays also highlighted Prysmian's comprehensive product offerings to data centers as another potential competitive advantage. These recent developments underscore Barclays' confidence in Prysmian's growth and profitability prospects.
InvestingPro Insights
As JPMorgan reinitiates coverage on Prysmian with an optimistic outlook, real-time data from InvestingPro underscores some key financial metrics that investors may find valuable. Prysmian's market capitalization currently stands at $18.66 billion, with a Price/Earnings (P/E) ratio of 31.58, reflecting a premium valuation in the market. Notably, the company's P/E ratio adjusted for the last twelve months as of Q1 2024 is slightly lower at 25.02. Additionally, Prysmian maintains a Price/Book ratio of 4.11, which may suggest a higher market valuation compared to the company's book value.
InvestingPro Tips indicate that Prysmian has been a prominent player in the Electrical Equipment industry, with a consistent dividend payment track record over 17 years and a rise in dividends for the past 4 years. This consistency in dividends might be particularly appealing to income-focused investors. Moreover, the company has been trading near its 52-week high, which could signal strong market confidence in its current and future prospects.
For readers interested in a deeper analysis, InvestingPro provides additional insights and tips that could further inform investment decisions. With a total of 14 InvestingPro Tips available, investors can access a comprehensive view of Prysmian's financial health and market performance. To take advantage of this resource, consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, which includes these valuable tips.
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