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Investing.com -- The cable sector continues to show promising investment opportunities, with several companies positioned for growth according to a recent Jefferies analysis.
High-voltage power cables and connectivity solutions remain in high demand, driven by energy transition projects and digital infrastructure expansion.
NKT emerges as the standout performer, while Prysmian maintains its strong position particularly in the US market. Meanwhile, Nexans faces more limited growth prospects despite its solid near-term outlook. Here’s a closer look at how these cable manufacturers stack up:
NKT (CPH:NKT)
Jefferies names NKT as its top pick in the cable sector with a street-high price target of DKK878, representing a potential 30% total shareholder return.
The Danish cable manufacturer has successfully navigated the key risks associated with its high-voltage capacity expansion, positioning it for the fastest earnings growth and leading margins in the sector by 2028.
Analysts project 8-11% upside to consensus Solutions EBITDA estimates for 2027-2028, supported by a high-quality order backlog. This improved performance is expected to reverse NKT’s underperformance relative to peers since 2024.
In recent news, NKT reported second-quarter revenue of €723 million, reflecting 13% organic growth, though its earnings per share did not meet forecasts.
Prysmian (BIT:PRY)
Prysmian earns a Buy rating with a price target of €102, suggesting a 17% total shareholder return potential. The company continues to deliver outstanding execution across all divisions.
As the most exposed player to the high-growth US market, Prysmian stands to benefit significantly from structural changes following tariff implementations that favor local manufacturers.
The company is well-positioned to capitalize on increasing demand from data centers and overall load growth in the low-voltage cable market. Jefferies sees 4-5% upside to consensus EBITDA estimates in coming years, with a valuation implying approximately 11x EV/EBITDA for 2027.
Prysmian announced second-quarter results where its earnings per share of $0.9904 slightly beat forecasts, while its revenue of €4.88 billion came in just below expectations.
Nexans (EPA:NEX)
Jefferies downgraded Nexans to Hold with a price target of €139, representing a more modest 7% potential total shareholder return. While the company maintains strong near-term growth prospects with acceleration in both its Power Grids and Connect divisions, analysts cite concerns about longer-term visibility.
Specific risks include uncertainty surrounding the Great Sea Interconnector project and the company’s accelerating M&A strategy. Unlike its peers, Nexans no longer shows upside to consensus estimates for coming years.
The new price target implies approximately 7x EV/EBITDA for 2026, reflecting a reduction in the Transmission multiple from 10x to 8x.
A recent development saw Nexans raise its full-year 2025 guidance following strong first-half results, which included second-quarter revenues of €1,950 million.
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