Nexans Shares Rise After J.P. Morgan Upgrade on Electrification Focus

Shares in French cable maker Nexans (NEXS) gained over 3% on Wednesday after J.P. Morgan upgraded the company to "Overweight" from "Neutral." The investment bank cited the successful completion of Nexans' multi-year corporate transformation, positioning it as a pure-play electrification company poised for accelerated growth.

Analyst Upgrade and Price Target

In a note to clients, J.P. Morgan raised its December 2027 price target for Nexans to €183 from a previous €160. Analysts said the company's stock now offers one of the strongest earnings growth profiles in the European electrification sector.

The upgrade follows what the bank described as solid first-half results. The firm's positive outlook is based on the belief that a key drag on earnings has been removed now that Nexans has concluded its portfolio simplification strategy.

From 'Simplification' to 'Amplification'

J.P. Morgan highlighted the completion of Nexans' "Simplify to Amplify" strategy, which involved several years of divestments that shed roughly one-third of its 2021 revenue base. With the final disposal of its Autoelectric business in July, the bank believes Nexans has now entered an "amplification phase."

This new phase will be driven by structural demand for electricity transmission and distribution infrastructure, rather than portfolio reshaping. According to the note, this allows the underlying performance of the core business to become more visible to investors.

Upbeat Earnings Outlook

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Analysts at J.P. Morgan now forecast a 15% compound annual growth rate (CAGR) in adjusted EBITDA for Nexans through 2028. The bank raised its own adjusted EBITDA forecasts for the company:

• 2026: Raised by 3% (now 4% above consensus)
• 2027: Raised by 4% (now 3% above consensus)
• 2028: Raised by 6% (now 6% above consensus)

The firm's 2028 adjusted EBITDA estimate is €1.10 billion, compared to a Bloomberg consensus of €1.04 billion. J.P. Morgan noted that Nexans trades at an attractive valuation of less than 9 times its estimated 2026 EV/EBITDA.

Key Growth Drivers

J.P. Morgan estimates that over 45% of Nexans' 2026 adjusted EBITDA will come from European electricity transmission and distribution markets. Growth in this segment is expected to be supported by a planned 40% increase in European Power Grid capacity between 2025 and 2028.

Furthermore, recent acquisitions, including Republic Wire and Electro Cables, are expected to strengthen Nexans' market position in North America. These additions expand the company's exposure to high-growth sectors such as data centers, infrastructure, and renewable energy.