Is Schneider Electric’s Current Price Justified After Its Recent Multi Year Rally?

• Wondering if Schneider Electric at €235.5 is a smart buy or just a great story on paper? Let us unpack what the current price really implies about its long term value.
• Over the last week the stock is up 1.9%, but it is still down 2.8% over 30 days, 2.5% year to date, and 4.8% over the past year, even after a strong 79.4% 3 year and 125.9% 5 year run.
• Recent moves have been shaped by ongoing enthusiasm around industrial automation, electrification, and energy efficiency. These are areas where Schneider is seen as a key beneficiary of global infrastructure and sustainability spending. At the same time, shifting expectations for interest rates and cyclicals has made investors more sensitive to how much they are paying for that growth.
• Our valuation checks suggest Schneider Electric scores just 1/6 on undervaluation. In the sections ahead we will dig into what different valuation methods say about the stock today, and then finish with a more holistic way to think about its true worth.

Schneider Electric scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Schneider Electric Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow model estimates what a business is worth by projecting the cash it can generate in the future and then discounting those cash flows back to today using a required rate of return.

Schneider Electric currently generates trailing twelve month free cash flow of about €3.8 billion. Analyst projections, extended by Simply Wall St beyond the formal forecast period, see free cash flow rising to around €6.7 billion by 2035. That path includes intermediate estimates such as roughly €5.2 billion in 2026 and €5.8 billion in 2029, reflecting solid but not explosive growth as the business scales in electrification and industrial automation.

When these projected cash flows are discounted back to today in a 2 Stage Free Cash Flow to Equity model, Simply Wall St calculates an intrinsic value of about €142.24 per share. With the stock currently trading around €235.50, the DCF implies the shares are roughly 65.6% above estimated fair value. This suggests investors are paying a steep premium for future growth.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Schneider Electric may be overvalued by 65.6%. Discover 906 undervalued stocks or create your own screener to find better value opportunities.

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

Approach 2: Schneider Electric Price vs Earnings

For a mature, consistently profitable business like Schneider Electric, the price to earnings ratio is a useful way to gauge what investors are paying today for each euro of current profits. In general, companies with stronger and more reliable growth, cleaner balance sheets, and lower perceived risk can justify a higher PE ratio than slower growing or more volatile peers.

Schneider currently trades on about 30.8x earnings, slightly above the broader Electrical industry average of roughly 29.5x, and meaningfully higher than its peer group average of around 24.5x. Simply Wall St also calculates a Fair Ratio of 33.4x, which reflects what a reasonable PE might be when factoring in Schneider’s earnings growth outlook, profitability, scale, industry positioning and specific risk profile.

This Fair Ratio is more tailored than a simple peer or sector comparison because it adjusts for Schneider’s own growth and risk characteristics, rather than assuming it should trade in line with an average company. With the current PE of 30.8x sitting below the Fair Ratio of 33.4x, the multiple approach suggests Schneider Electric is trading at a modest discount to what its fundamentals might warrant.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Schneider Electric Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives, a simple framework that lets you write the story behind your numbers, including your view of Schneider Electric’s fair value, and your assumptions for its future revenue, earnings and margins. A Narrative links three things together: the company’s story, a quantified financial forecast, and a resulting fair value, so you can see exactly how your beliefs translate into a price. Narratives are easy to use and live inside the Community page on Simply Wall St, where millions of investors can share, compare, and refine their views. Once you have a Narrative, the platform continuously compares your Fair Value to today’s share price, helping you decide when Schneider Electric looks like a buy, hold, or sell, and automatically updates your view as new news, earnings and guidance come in. For example, one Schneider Electric Narrative might see strong data center demand and margin expansion supporting a fair value near €289, while a more cautious Narrative focused on FX headwinds and Europe weakness might land closer to €220.

Do you think there's more to the story for Schneider Electric? Head over to our Community to see what others are saying!

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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