On Friday, Barclays initiated coverage of Nexans shares with an 'underweight' recommendation and a price target of 94 euros, indicating a downside potential of 6%.

In a research note, the British bank believes that further progress at the strategic level is needed to justify a continued share price upgrade.

In Barclays' view, the market is underestimating the burden of the oldest contracts, as well as the possibility of disappointment regarding the expected improvement in profit margins in high-voltage cables by 2024/2025.

The London-based institution also considers the prospect of an upward revision of low-voltage margins to be ambitious, and believes that the consensus also underestimates the scale of forthcoming capital expenditure, which is likely to weigh on cash flow.

This lack of visibility ahead of the November 2024 investor day, as well as the uncertainties surrounding restructuring, could limit investor appetite.

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