Will Legrand’s (ENXTPA:LR) Growth Outlook Outweigh Mixed Demand Signals for Investors?

• Legrand SA recently confirmed its full-year 2025 earnings guidance, projecting sales growth of 10% to 12% excluding currency effects, and reported nine-month sales of €6.97 billion with net income of €892.3 million.
• While the company highlighted ongoing growth and a positive outlook for data centres, attention has shifted to softer demand trends and the timing of future growth as quarterly sales growth missed some analyst expectations.
• We'll examine how Legrand's reaffirmed sales guidance and mixed demand signals could shift the company's investment narrative going forward.

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Legrand Investment Narrative Recap

To be a shareholder in Legrand, you need to believe that strong, sustained demand for data centers and digital infrastructure will continue to drive robust sales growth. The reaffirmed 2025 guidance is encouraging, though the latest update, where quarterly sales missed some expectations, puts the focus back on the biggest short-term catalyst: ongoing data center demand. The main immediate risk is that slower growth in core non-data center markets could dampen broader performance if current trends persist, but the news does not materially change this balance.

Among recent announcements, the confirmation of 10% to 12% FY2025 sales growth (excluding currency effects) stands out as most relevant to these updates. By sticking to its prior guidance despite near-term volatility, Legrand aims to assure investors that the structural drivers behind data center demand remain intact, yet, this also spotlights how sensitive the narrative is to any signs of broader weakness outside this segment.

However, beneath renewed optimism for data centers, investors should also recognize the ongoing risk that...

Read the full narrative on Legrand (it's free!)

Legrand's narrative projects €11.1 billion revenue and €1.5 billion earnings by 2028. This requires 6.4% yearly revenue growth and a €0.3 billion earnings increase from €1.2 billion.

Uncover how Legrand's forecasts yield a €143.94 fair value, a 11% upside to its current price.

Exploring Other Perspectives

Three members of the Simply Wall St Community have fair value estimates for Legrand that range widely, from €90.07 to €143.94. While many are focused on current data center momentum, the risk from slower non-data center growth reminds us that investor views about the company's longer-term prospects can be sharply divided.

Explore 3 other fair value estimates on Legrand - why the stock might be worth as much as 11% more than the current price!

Build Your Own Legrand Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Legrand research is our analysis highlighting 2 key rewards that could impact your investment decision.
• Our free Legrand research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Legrand's overall financial health at a glance.

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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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