Mersen Stock Jumps 8.5% After Berenberg Upgrade Cites Data Center Growth

Shares of French electrical components manufacturer Mersen (EPA:CBLP) surged 8.5% in recent trading after analysts at Berenberg upgraded the stock to "Buy" from "Hold." The move followed the company's strong first-half results and an upward revision to its full-year financial guidance.

The Analyst Upgrade

Berenberg raised its price target on Mersen shares by 4% to €50 per share. In a note to clients, the brokerage highlighted several positive factors underpinning its more optimistic view on the company's prospects.

The primary driver for the upgrade is accelerating growth in Mersen's electrical power division, which is benefiting from strong demand related to data center and grid infrastructure projects. This positive momentum comes after Mersen raised its full-year guidance on Thursday, targeting the upper end of its previous range for both revenue and margins.

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Data Center and Semiconductor Strength

Analysts at Berenberg noted the company's significant exposure to the booming data center market. Mersen now expects its revenues from this segment to exceed €40 million in 2026, which would represent a doubling from projected 2025 levels. The firm's silicon semiconductor business also continues to show strong performance, according to the note.

While the company's advanced materials division remains a weak point due to soft conditions in the solar and chemicals markets, Berenberg suggested the stock's valuation does not fully reflect the growth in other areas. The brokerage concluded that the shares appear "undemanding" at a valuation of 12 times its estimated 2027 earnings.