Evercore ISI Upgrades Legrand on Datacenter Strength, Downgrades Siemens on Valuation

Evercore ISI on Friday upgraded its rating on Legrand SA to "Outperform" on the back of the company's expanding datacenter business, while simultaneously downgrading industrial giant Siemens AG to "In Line", arguing that expected margin improvements are already priced into the stock.

Following the analyst actions, shares of Legrand gained 2.8%, while Siemens stock was up 1% in early European trading, according to the report.

Legrand Upgraded on Datacenter Growth

Evercore's upgrade of Legrand is rooted in the company's significant exposure to the high-growth datacenter market and a compelling valuation discount compared to its peers. The investment firm maintained its €175 price target for Legrand, which implies approximately 25% upside from its recent price of €141.60.

Analysts at Evercore noted that Legrand now derives over 30% of its sales from datacenters, a figure the company projects could exceed 45% by 2030. This outlook prompted Legrand to raise its own annual organic growth target to a range of 6% to 8%. Evercore also highlighted that Legrand trades at a roughly 20% discount to its electrical equipment peers based on an enterprise value-to-EBITA multiple of less than 15 times for 2027.

Ad

Siemens Cut Due to Limited Upside

For Siemens, Evercore downgraded the stock from "Outperform," stating that anticipated margin gains in its Digital Industries and Smart Infrastructure divisions are largely reflected in its current valuation. While the firm kept its €315 price target, it calculates this offers a limited total return of just 11.3%.

Evercore forecasts that Siemens will see limited earnings momentum from its fiscal 2027 outlook. The firm's margin forecasts for the Digital Industries (19% to 21%) and Smart Infrastructure (19% to 20%) segments are slightly below consensus expectations, suggesting little room for positive surprises. The analysts' fourth-quarter forecasts for Siemens are broadly in line with market consensus, further supporting the view that near-term catalysts are limited.