Jefferies sees pricing pressure in low voltage for European Cables
04/03/2025 11:35
** Jefferies sees signs of increasing pricing pressure in low voltage (LV) in European Cables mainly driven by volume weakness ** Autos remain the main driver of weakness in industrial cables, the broker says ** But it notes that Nexans NEXS.PA is showing more resilience versus Prysmian PRY.MI (keeps "buy" on both) given the former exposure mainly to premium German Original Equipment Manufacturers (OEMs) and volume agreements ** Jefferies upgrades NKT NKT.CO to "hold" from "underperform" as it sees the execution risk on capex and path of EBITDA near-term reflected in the shares ** However, the brokerage says trends for the sub-sector remain solid with strong demand from frame-agreements with further deals expected in 2025 ** It notes that the European players point to continued good market activity (tenders, pipeline) and further awards for 2025, although coming down from abnormal record volumes seen in 2023 ** Jefferies adds that U.S. peers also point to continued cyclical recovery in 2025 driven by discussions with large carriers, and despite still limited support from the Broadband Equity, Access, and Deployment (BEAD) Program (Reporting by Marta Frackowiak) ((marta.frackowiak@thomsonreuters.com))