JPM says Data Center exposure still key to mid-term utilities growth, picks Legrand

Legrand SA

29/08/2025 09:07

** J.P.Morgan assumes 'Neutral' coverage on electrical equipment suppliers ABB ABBN.S and Schneider Electric SCHN.PA and rates Legrand LEGD.PA 'Overweight', as data center exposure should drive margin growth

** JPM sees DC (Data Center) growth continuing to be strongly accretive to the growth outlook of the electrical sector for several years, most likely in the 20-40% range

** It estimates France's Legrand LEGD.PA and Schneider SCHN.PA to have the highest exposure to DC at about 24% of revenue, with peers ABB ABBN.S and Siemens SIEGn.DE at about 6% and 2% respectively

** As typically high-margin segments begin to recover—alongside continued growth in data centers— the broker sees upward revisions to Legrand’s earnings forecasts

** While Schneider's growth remains attractive, outperforming peers in recent years thanks to a superior portofolio and exposure to the fastest growing end markets, JPM expects peers organic growth to catch up in 2026

** JPM notes the absence of a planned CMD for Schneider which would allow to address questions around the co's leverage and cost profile, while Siemen's planned update 'will include key portfolio changes which will drive the investment case and forward multiples'

 (Reporting by Alban Kacher)

 ((Alban.kacher@thomsonreuters.com; +48 58 769 65 87))