MS upgrades Schneider Electric citing 'momentum shift in margins'

Schneider Electric SE

27/10/2025 07:25

** Morgan Stanley upgrades French energy management and automation group Schneider Electric SCHN.PA to "overweight" from "equal-weight", citing a "momentum shift in margins"

** The brokerage expects Schneider's margin expansion to lead peers in 2026-27, driven by productivity savings, a recovery in high-margin segments, and the end of a software-as-a-service (SAAS) transition

** MS raises its PT by almost 17% to EUR 280, forecasting sector-leading EPS growth in 2027 on strong organic growth and margin expansion

** The broker highlights the company's world-class data centre business, with its end-to-end offering and NVIDIA NVDA.O design partnerships, as a key long-term advantage

** Morgan Stanley notes valuation is now more reasonable versus peers and sees scope for the company to restart share buybacks in 2027 after deleveraging

** So far this year, Schneider Electric's shares have extended last year's gains of 32.5% by about another 6%

** Out of 26 analysts covering Schneider Electric, 19 rate the stock "strong buy"/"buy" and ​seven "hold" - LSEG data

(Reporting by Clement Martinot)

((Clement.Martinot@thomsonreuters.com;))