TSX higher on employment data
Investing.com -- European electrification stocks are emerging as standout performers in 2023, with the sector up 23% year-to-date on earnings expectations that have increased by 10%, according to UBS analysis.
As Europe continues its aggressive push toward renewable energy infrastructure, several companies are positioning themselves at the forefront of this mega-theme that could dominate investment landscapes for decades to come.
The electrification sector is benefiting from multiple growth catalysts, including increased electricity demand from reshoring manufacturing in the US, growing power needs from AI data centers, and the critical requirement for enhanced energy management and storage solutions across power networks.
UBS notes that while investor enthusiasm for the theme is evident, the sector remains reasonably valued with significant earnings momentum potential.
Here are the top European electrification stocks according to UBS rankings:
1. SPIE - The French multi-technical services provider leads UBS’s rankings, excelling in electrical engineering and energy efficiency solutions. SPIE’s extensive portfolio of services supporting grid infrastructure and renewable energy integration positions it perfectly to capitalize on Europe’s electrification push.
The company’s consistent operational execution and exposure to long-term infrastructure spending have made it a top pick for investors seeking direct exposure to the electrification theme.
In recent news, SPIE SA reported strong second-quarter 2025 results, with revenue increasing 5.8% year-over-year to €4.979 billion. Subsequently, Morgan Stanley downgraded its rating on the stock to Equalweight from Overweight, citing valuation concerns after a significant price appreciation.
2. Siemens - The German industrial giant secures the second position with its comprehensive electrification offerings spanning smart grid technology, building automation, and industrial digitalization.
Siemens’ established market presence and technological leadership in power distribution and automation systems provide it with significant advantages as Europe accelerates its energy transition. The company’s digital solutions for managing complex electrical systems are increasingly valuable as renewable penetration grows across European power networks.
Siemens AG has received mixed analyst ratings, including a downgrade to Market Perform from Bernstein and a reiterated Buy rating from Citi. The company also unveiled new AI-enhanced electronic design automation (EDA) tools aimed at the semiconductor industry.
3. Prysmian - The Italian cable manufacturer rounds out UBS’s top three, specializing in high-performance cables essential for power transmission and distribution infrastructure.
Prysmian’s products are critical components in renewable energy projects, grid interconnections, and submarine power links that form the backbone of Europe’s evolving electrical infrastructure. The company’s technological expertise in high-voltage direct current (HVDC) cables positions it to benefit substantially from the massive investments planned in offshore wind and cross-border power connections throughout Europe.
Prysmian announced its second-quarter 2025 financial results, reporting an earnings per share figure that beat analyst expectations. The company’s revenue of 4.88 billion euros, however, came in slightly below forecasts.
As electricity demand continues to grow and Europe maintains its commitment to renewable energy expansion, these companies represent core investment opportunities in what UBS describes as a "mega-theme for this decade and maybe the next." The sector’s performance suggests investors are recognizing the substantial growth potential while valuations remain reasonable relative to earnings expectations.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.