BofA Flags Three European Industrials as Undervalued on Data Center, Energy Tailwinds

Bank of America has identified three European industrial stocks whose recent share price declines present a compelling investment case, according to a new analyst note. The bank reiterated its Buy ratings for Schneider Electric, Siemens Energy, and Prysmian, arguing that current valuations reflect overly pessimistic scenarios despite solid operational performance and exposure to high-growth sectors.

Valuation Disconnect

According to BofA, recent market volatility has driven down valuations for these companies to levels that appear to price in harsh downside scenarios. The bank contends this view is disconnected from the firms' strong underlying business fundamentals and robust demand drivers.

BofA highlighted that all three companies are strategically positioned to benefit from key secular growth trends, including the expansion of data centers, investments in energy infrastructure, and the broader push toward electrification. Despite market concerns, management at each company has indicated solid demand and operational strength.

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Bank of America provided specific reasons for its positive outlook on each company:

• Schneider Electric (SCHN): The firm is benefiting from broad-based and durable demand from the data center sector, with management citing growing visibility into 2027 and 2028. The company reported another record backlog, with growth primarily driven by China and East Asia, complementing persistent demand from U.S. hyperscalers. BofA also noted Schneider's strategic software acquisitions of Cognite and PTC.
• Siemens Energy (ENR1n): The bank expects demand for Siemens Energy's offerings to expand beyond data centers into the broader electricity market. The company's latest results showed strong global electricity demand, with the U.S. as a primary driver of orders. Notably, its wind division achieved its first profitable quarter in years, and management indicated margins are tracking toward the upper end of guidance.
• Prysmian (PRY): As a leading cable manufacturer, Prysmian connects both energy and data infrastructure. BofA highlighted recent acquisitions of Molex and Atkore as moves that strengthen its leadership and deepen its presence in the data center supply chain. Management reports that underlying business fundamentals remain unchanged, with data center demand expected to support performance in the second half of the year.