Schneider Electric (ENXTPA:SU): Assessing Valuation After a Period of Steady Share Price Performance

Schneider Electric (ENXTPA:SU) shares have shifted only slightly in recent trading, and investors are watching for signals after a relatively calm period. The company’s solid performance lately provides some context for its current valuation.

See our latest analysis for Schneider Electric.

While the share price has held steady lately, Schneider Electric’s one-year total shareholder return sits at a modest 8.3% and its five-year return is well over 150%. This suggests that momentum has cooled somewhat after a strong multi-year run, with investors watching closely for signs of the next phase.

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But after sustained gains and steady fundamentals, is Schneider Electric trading below its true value? Or has the market already accounted for future growth in its current price, leaving little room for upside?

Most Popular Narrative: 3% Undervalued

With Schneider Electric’s estimated fair value at €257.55 and shares closing at €249.70, the narrative suggests a modest upside that has investors weighing just how much growth is already anticipated in the stock price.

The company's transition toward software and recurring digital services (notably EcoStruxure, AVEVA SaaS, and EcoCare), now representing 60% of revenues and growing at double-digit rates, is expected to drive higher margins and recurring earnings. There is further upside potential as AVEVA's SaaS conversion completes by 2027.

Read the complete narrative.

Want to know what’s powering this outlook? The most influential narrative hinges on ambitious growth from digital services, expanding revenue streams, and plump margins. What crucial forecasts set this price target above the current share price? Click through for the detailed assumptions and expectations that drive this valuation.

Result: Fair Value of €257.55 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing margin pressures and persistent weakness in Industrial Automation could still challenge Schneider Electric’s positive growth outlook in the near term.

Find out about the key risks to this Schneider Electric narrative.

Another View: What Do the Multiples Suggest?

Looking at valuation from a different angle, Schneider Electric’s current price-to-earnings ratio stands at 32.7x, which is higher than both the European Electrical sector average of 23.5x and the peer group average of 26.2x. While this premium hints at strong growth expectations, it also introduces valuation risk if those expectations are not met. Interestingly, the fair ratio for Schneider Electric is estimated at 35.1x, indicating the market could move even higher. The question remains: will it?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Schneider Electric Narrative

If you find yourself seeking a different perspective, or simply want to dive into the numbers personally, you can put together your own view in just a few minutes. Do it your way

A great starting point for your Schneider Electric research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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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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