Legrand: share benefits from broker comments

(CercleFinance.com) - Legrand shares were doing well on Thursday morning in Paris, after Deutsche Bank upgraded its recommendation on them, saying that it is now time to be "constructive" about the company.


At around 10am, shares in the French manufacturer of electrical infrastructure for the building industry gained 2.4%, heading the CAC 40 (+0.7%).

Deutsche Bank announced this morning that it had raised its recommendation on the stock from 'hold' to 'buy', with a target price raised from E100 to E115.

The broker justifies its decision by the group's high exposure to the construction market, which it believes should benefit from the current cycle of falling interest rates.

While the premium on which Legrand's P/E is traded relative to the rest of the sector has fallen from 20% to 10%, the analyst expects the stock to regain momentum as growth strengthens.

Deutsche Bank adds that it values Legrand's positioning as a 'niche market giant', and its ability to capitalize on trends such as electrification, the connected home and energy efficiency.

It adds that, with growing concerns about the health of the economy, the Group's defensive qualities (high and stable margins, free cash flow, price control) should once again be valued by the market.


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