Is There Still Upside for Legrand After Surging 52% in 2025?

If you have been watching Legrand lately and wondering whether now is the right time to jump in or take your profits, you are definitely not alone. The stock has been a standout performer, and just glancing at its numbers, it is hard not to be impressed. With a return of 52.5% since the start of the year and a one-year climb of 43.8%, Legrand has not only defied cautious sentiment but managed to outpace the broader market. Even over the last three years, the stock has soared an impressive 122.0%. This kind of performance has certainly rewarded patient investors.

But that remarkable run comes with its own set of questions, especially for those concerned about whether there is any upside left. Over the past month, Legrand rallied another 9.0%, though gains have paused a bit in the last week with a slight dip of 0.2%. This raises the question of whether the rally is losing steam or simply catching its breath. Some of this momentum is tied to ongoing market optimism around infrastructure and smart building solutions, both of which put Legrand in a strong position for future growth. However, assessing whether the current price reflects too much optimism is another matter entirely.

This brings us to the important question of valuation. Based on six different checks, Legrand scores a 0 out of 6 for being undervalued, which signals that traditional valuation screens see little bargain at today’s price. Before deciding what to do with your shares, it is worth looking a bit deeper at how these valuation approaches work, and why there might be even more insightful ways to judge Legrand’s true worth before making any moves.

Legrand scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Legrand Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model works by forecasting a company’s future cash flows and discounting them back to today’s value. This approach aims to estimate what the entire business is worth right now, based on its ability to generate cash in the future.

For Legrand, the latest reported Free Cash Flow (FCF) was approximately €1.3 billion. Analyst forecasts extend out several years, predicting FCF to rise to around €1.76 billion by 2029. Beyond this period, further growth estimates are extrapolated, with expected FCF reaching about €2.06 billion by 2035, according to Simply Wall St’s two-stage Free Cash Flow to Equity model.

Using these forecasts and discounting them to present value, the model suggests Legrand’s intrinsic value is about €94.12 per share. The stock’s current market price is more than 50% above this estimate, so the model implies the shares are 51.8% overvalued at today’s price.

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Legrand.

Our Discounted Cash Flow (DCF) analysis suggests Legrand may be overvalued by 51.8%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Legrand Price vs Earnings

For a profitable company like Legrand, the Price-to-Earnings (PE) ratio is a widely used metric because it connects a company’s market valuation directly to its ability to generate profits. Investors often rely on the PE ratio to see how much they are paying for each euro of current earnings, making it especially relevant when steady profits are involved.

It is important to recognize that a company’s growth prospects and perceived risk play a major role in what is considered a normal or fair PE ratio. Fast-growing companies typically trade at higher PE multiples, while higher risk or lower growth justifies a lower PE.

At present, Legrand trades on a PE of 30.8x. This is very close to the average PE for the broader Electrical industry, which sits at 31.6x. However, it is significantly higher than the average for Legrand’s peer group at 18.8x. While peer or industry comparisons can be helpful, they do not tell the whole story.

This is why Simply Wall St’s proprietary Fair Ratio offers a more nuanced view. The Fair Ratio, at 24.4x for Legrand, takes into account not just earnings but also the company’s growth, profitability, risks, industry factors and market cap, delivering a benchmark tailored to the stock’s individual situation. It is more comprehensive than simple peer or industry averages.

Comparing Legrand’s actual PE to its Fair Ratio suggests the stock is priced above what fundamentals would justify. With a PE of 30.8x versus a Fair Ratio of 24.4x, the shares appear overvalued using this approach.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Legrand Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives: a simple yet powerful tool that helps you link the story you believe about a company directly to its financial forecast and estimated fair value.

A Narrative is more than just numbers; it lets you describe your view of Legrand’s future, such as expected revenue, earnings, margins and risks, and then see how that story translates to a fair value estimate based on your assumptions.

On Simply Wall St’s Community page, millions of investors use Narratives to share and update their perspectives, making it easier than ever to see how different forecasts and opinions compare with the current share price.

Crucially, Narratives are dynamic. When news breaks or new earnings reports are released, the inputs automatically update, giving you a living, breathing valuation picture that keeps pace with real events.

For example, some investors see data center demand and electrification trends unlocking future value for Legrand and set a fair value above €165. Others are more cautious, focusing on market risks or margin pressures, and estimate fair value closer to €82. Narratives let you position your outlook on this spectrum and make decisions based on your own convictions.

Do you think there's more to the story for Legrand? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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