Xia Yu, director at Summit Therapeutics, buys $9.9 million in shares
Investing.com -- Kepler Cheuvreux cut its recommendation on Legrand SA (EPA:LEGD) to "hold" from "buy," pointing to stretched valuations and expectations running ahead of company guidance, sending shares lower on Wednesday.
The brokerage said Legrand’s shares have already priced in much of the positive outlook, particularly in its data center business, which is expected to remain a strong driver of growth.
The stock closed at €140.60 on September 30, with a new 12-month price target of €152, up from €142. That implies an 8.1% upside potential.
Analysts noted that consensus estimates for revenue and profit in 2025 are above the company’s own guidance.
To meet investor expectations, management would need to raise targets with its third-quarter results scheduled for November 6.
The brokerage highlighted risks tied to a premium valuation and strong sentiment, which could pressure near-term returns.
Data centers, representing about 25% of sales, are forecast to grow over 30%, compared with Legrand’s guidance of 20–25%.
Meanwhile, the group’s exposure to European residential construction remains a drag, though indicators point to recovery beginning in 2026.
Kepler Cheuvreux’s updated forecasts show sales of €9.63 billion in 2025, rising to €10.96 billion in 2027.
Adjusted EBIT is projected to grow from €2.01 billion in 2025 to €2.36 billion in 2027, while adjusted earnings per share are seen at €5.17 in 2025 and €6.18 in 2027.
The brokerage underlined that while Legrand continues to benefit from strong fundamentals and resilient cash generation, the shares now appear fairly valued following a 49.5% year-to-date gain.