Schneider Electric: share rises on Goldman double upgrade

(CercleFinance.com) - On Thursday, Schneider Electric shares posted one of the strongest gains on the CAC 40, boosted by Goldman Sachs directly upgrading the stock from 'sell' to 'buy'.


At 10:40 a.m., shares in the French specialist in low and medium-voltage electrical equipment were up 1.3%, posting the second-best performance on the CAC behind ArcelorMittal (+2.4%).

The stock thus continues its recent recovery after losing over 19% in the last two weeks, which had led it to hit a low since last September last week.

In a study released this morning, Goldman considers that the stock's valuation is no longer as high as it may have been in the past, and that a rebound towards ratios in line with those of its main comparables could materialize.

In its view, the share price's adverse reaction, relating to concerns about capital spending in data centers, is overdone.

We expect Schneider's organic sales growth to significantly exceed that of other players in the sector over the next two years, the broker says.

Goldman Sachs, which is raising its 12m target price from E214 to E280, says the release of Q1 results, scheduled for 28 April, could be the next catalyst for the stock.

Analysts say that they downgraded Schneider shares to 'sell' in 2019, amid concerns about the Chinese construction sector and a significant premium to the sector.


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