Legrand: the share loses, Berenberg finds the stock attractive
March 06, 2024 at 06:04 am
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Legrand shares were the biggest gainers in the CAC 40 index on the Paris Bourse on Wednesday, benefiting from Berenberg analysts' increased optimism about the electrical equipment manufacturer.
In a lengthy study devoted to industrial stocks, the German analyst indicates that he has raised his recommendation on Legrand from 'hold' to 'buy', with a price target raised from 95 to 110 euros.
In its note, the financial intermediary justifies its upgrade by the potential for positive surprises in relation to consensus forecasts, and by the stock's recent relative underperformance.
In its view, Legrand is particularly interesting to play as a player in the data center market, an overlooked business that accounts for 15% of its sales, at a time when its growth has recently been penalized by its exposure to the residential segment, where it is more present than its peers.
At the end of the morning, the share was up 1.8%, while the CAC was nibbling away at less than 0.1%.
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Legrand is the global specialist in electrical and digital building infrastructure. Its comprehensive range, suitable for the commercial, industrial, and residential segments of the low voltage market, makes Legrand a benchmark for customers worldwide. Close to its markets and focused on its customers, Legrand has commercial and industrial operations in over 90 countries. The group benefits from solid, long-term growth levers.
Geographically, 41.4% of net sales are generated Europe region, 38.6% in North and Central America and 20% in the rest of the world.
In terms of product offering, 36% of its sales come from products with enhanced value in use (datacenters, connected products in the Eliot program, and energy efficiency programs).
In addition, the group benefits from very solid social and technological megatrends which will support its long-term development.