Data Center Demand And Electrification Will Unlock Future Value

Legrand's analyst price target has been increased from approximately €134 to €142. This reflects heightened optimism from analysts, driven by stronger data center exposure and recent upgrades in margin and growth assumptions.

Analyst Commentary

Recent analyst updates reflect growing optimism about Legrand's positioning and prospects, particularly around the company's increasing exposure to data centers. The consensus price targets have seen material upgrades in recent months, underlining a more positive outlook for earnings growth and operational execution.

• Bullish analysts cite a significant increase in Legrand’s data center exposure, which has risen from 5 percent to 27 percent over the past decade. This change is seen as a key driver for upgrades to Buy or Overweight ratings.
• Multiple increases in target prices indicate expectations of faster growth and improved margins. These expectations are tied to portfolio expansion and strong business execution.
• Inclusion on major focus lists reflects confidence in Legrand's upside potential compared to consensus estimates. This highlights both relative valuation strength and positive momentum.
• Sustained upgrades over several months suggest a broad-based belief that Legrand can capitalize on sector tailwinds and deliver above-average returns.

• Bullish analysts' views, while optimistic, imply that valuation may become stretched if growth expectations are not met. This introduces the risk of downside revisions in the future.
• Rapid expansion into the data center segment presents integration and execution challenges, which could impact margins if not managed effectively.
• Continued reliance on sector-specific growth could expose Legrand to cyclical downturns or competitive pressures. This could make sustained outperformance harder to achieve.

What's in the News

• Legrand completed the repurchase of 475,000 shares for €48.66 million under the buyback announced on March 31, 2025 (Key Developments).
• The company repurchased 452,500 shares between April 1, 2025 and June 30, 2025, representing 0.17% ownership for €46.47 million (Key Developments).
• Legrand revised its 2025 full-year sales target upward, now expecting sales growth of 10% to 12% excluding exchange-rate impact. This includes expected organic growth of 5% to 7% and growth from acquisitions of approximately 5% (Key Developments).
• A Board Meeting is scheduled for July 30, 2025 to adopt the consolidated financial statements for the first half of 2025 (Key Developments).

Valuation Changes

• The Fair Value Estimate has increased from approximately €134.00 to €142.33, reflecting increased confidence in Legrand's underlying fundamentals.
• The Discount Rate has risen slightly from 8.59% to 8.80%, indicating a modest adjustment in perceived risk or market conditions.
• The Revenue Growth Forecast has gone up from 6.94% to 7.30%, pointing to stronger expected top-line expansion.
• The Net Profit Margin is now forecast at 14.07%, up from 13.86%, suggesting a slightly improved operational efficiency or profitability outlook.
• The Future P/E Ratio has increased from 28.79x to 29.99x, indicating a higher market valuation relative to expected earnings.