HUBB: Raised EPS Outlook And Dividend Increase Will Drive Renewed Upside

Analysts have lowered their price target on Hubbell by about $3 to reflect slightly reduced fair value estimates and a view that the stock's current valuation already incorporates its modest organic growth outlook.

Analyst Commentary

Recent Street research reflects a balanced view on Hubbell, with analysts acknowledging solid fundamentals but questioning how much upside remains at the current share price.

Bullish Takeaways

Bullish analysts highlight the company’s favorable end market exposure as a key support for steady demand and earnings stability over the medium term.
They see Hubbell’s diversified customer base as a buffer against cyclical swings, supporting a premium relative valuation to some peers.
Positive views also point to the potential for operational execution and margin management to sustain earnings even if top line growth remains muted.

Bearish Takeaways

Bearish analysts argue that the current valuation already prices in much of Hubbell’s anticipated earnings power, leaving limited room for multiple expansion.
They remain cautious that recent organic growth has been negative or only in the low single digit range, which may constrain upside to revenue estimates.
Concerns are also tied to execution risk if end market conditions soften further, which could expose the stock’s full valuation and pressure near term returns.
Some see a more attractive risk reward profile only if share price weakness provides a better entry point relative to the company’s growth and margin outlook.

What's in the News

Hubbell raised its 2025 diluted EPS guidance to a range of $16.55 to $16.75 and now expects 3% to 4% total and organic net sales growth for the year (company guidance update).
The Board approved an 8% increase in the annual dividend to $5.68 per share, or $1.42 quarterly, payable December 15, 2025 to shareholders of record on November 28, 2025 (dividend announcement).
Long serving CFO Bill Sperry will retire from the CFO role effective December 31, 2025. Joseph Capozzoli has been appointed to succeed him as Senior Vice President and CFO beginning January 1, 2026, following a planned transition period (executive leadership update).
The company reported no share repurchases in the tranche from July 1, 2025 to September 30, 2025 under its February 12, 2025 buyback authorization (buyback tranche update).
Hubbell also completed the repurchase of 710,000 shares, or 1.32% of shares outstanding, for $265.1 million under the buyback program announced on October 21, 2022 (buyback tranche completion).

Valuation Changes

The fair value estimate has fallen slightly to about $479 from approximately $481, reflecting a modest downward revision in intrinsic value.
The discount rate has edged down marginally to roughly 9.32% from about 9.35%, indicating a slightly lower assumed cost of capital.
Revenue growth has risen slightly to around 6.73% from approximately 6.73%, implying a nearly unchanged but marginally more optimistic top-line outlook.
The net profit margin has eased fractionally to about 15.79% from roughly 15.79%, signaling an almost flat, slightly lower margin expectation.
The future P/E has declined slightly to about 29.2x from roughly 29.4x, suggesting a small reduction in the forward valuation multiple applied to earnings.

Hubbell's segments are experiencing strong organic growth and improving margins supported by demand in data centers and grid modernization.
Actions tackling cost inflation are anticipated to stabilize earnings, while investments in acquisitions should sustain revenue growth and EPS expansion.
Hubbell's profitability is threatened by tariff risks, cost inflation, and macroeconomic uncertainty, necessitating effective pricing strategies to maintain net margins.

Catalysts

About Hubbell

Designs, manufactures, and sells electrical and utility solutions in the United States and internationally.What are the underlying business or industry changes driving this perspective?

Hubbell's Electrical Solutions segment is achieving mid-single-digit organic growth and improved operating margins, bolstered by strong demand in data centers and continuing efforts in business simplification, which should support long-term margin expansion. This is expected to positively impact revenue and net margins.
The Utility Solutions segment is experiencing organic growth resurgence, particularly in grid infrastructure, supported by strong transmission and substation markets due to increasing grid modernization and electrification. This growth trend should drive higher future revenues.
Hubbell is implementing pricing and productivity actions to combat cost inflation from raw materials and tariffs, aiming for neutral impact in 2025. Successfully offsetting these costs is expected to stabilize earnings and improve net margins in the latter part of the year.
Significant order growth in grid infrastructure, driven by broad market strength and favorable end-market dynamics, suggests a strong future revenue stream as the company moves beyond a period of inventory normalization.
Continued investment in acquisitions and focus on market-leading positions in utility and electrical markets, underpinned by secular growth trends, are expected to sustain long-term revenue growth and EPS expansion.

Hubbell Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Hubbell's revenue will grow by 6.3% annually over the next 3 years.
Analysts assume that profit margins will increase from 14.7% today to 15.7% in 3 years time.
Analysts expect earnings to reach $1.1 billion (and earnings per share of $19.64) by about September 2028, up from $829.1 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 28.4x on those 2028 earnings, up from 28.0x today. This future PE is lower than the current PE for the US Electrical industry at 33.7x.
Analysts expect the number of shares outstanding to decline by 0.99% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.84%, as per the Simply Wall St company report.

Hubbell Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Hubbell is facing increased cost inflation from higher raw material prices and newly implemented tariffs, which could negatively impact net margins if not fully offset by pricing actions.
Grid automation sales were down due to challenging prior year comparisons, and a continued decline could affect future revenue growth in this segment.
The reliance on components sourced from China exposes Hubbell to tariff risks and potential supply chain disruptions, which might impact earnings if not managed well.
The recent macroeconomic uncertainty and potential recession may dampen demand, leading to lower sales volumes and affecting overall revenue and earnings.
There is execution risk associated with effectively implementing pricing strategies to fully mitigate tariff and cost increases, which could impact net margins and profitability if not successfully managed.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $456.727 for Hubbell based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $511.0, and the most bearish reporting a price target of just $383.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $6.8 billion, earnings will come to $1.1 billion, and it would be trading on a PE ratio of 28.4x, assuming you use a discount rate of 8.8%.
Given the current share price of $437.24, the analyst price target of $456.73 is 4.3% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

HUBB: Organic Momentum And Management Execution Will Shape Balanced Outlook