J.P. Morgan Places France's Legrand on 'Positive Catalyst Watch'

Investing.com — J.P. Morgan has placed France-based electrical equipment supplier Legrand SA on its “Positive Catalyst Watch” in the run-up to the company’s Capital Markets Day (CMD) scheduled for September 29. Analysts anticipate solid long-term growth fueled by rising demand from data centers.

The American investment bank reiterated its “Overweight” recommendation and a street-leading price objective of €200.00, which implies an approximately 42% gain relative to the stock’s last close of €140.90.

J.P. Morgan forecasts that Legrand will present an attractive growth narrative, with organic revenue potentially expanding at a compound annual rate of 7% to 10% through 2030. That would align with industry front-runner Schneider Electric SE and surpass the prevailing market consensus of about 6%.

Data Centers Fuel Growth Acceleration

The optimistic view is underpinned mainly by Legrand’s increasing involvement in data center infrastructure, which currently represents around 30% of group-wide revenue—a larger proportion than Schneider Electric’s equivalent exposure.

Since 2019, Legrand’s data center segment has achieved an 18% like-for-like compound annual growth rate (CAGR), and the pace has picked up in recent quarters. J.P. Morgan projects that data center revenue will continue growing by 20% to over 30% annually through 2030, adding 7 to 10 percentage points directly to total group expansion.

At the same time, the other two-thirds of Legrand’s operations—concentrated mainly in European homebuilding and U.S. commercial office projects—have stabilized after an extended period of significant macroeconomic difficulties.

According to J.P. Morgan analysts, market expectations are fairly subdued, and there are lingering questions about the long-term alignment of the data center business. They believe, however, that the company’s CMD presentation will deliver reassuring news on growth and strategic positioning, which is likely to be well received by shareholders.

J.P. Morgan anticipates that Legrand’s management will unveil a comprehensive technology plan—encompassing its sidecar offering—to address investor worries about possible structural drawbacks in next-generation AI data center environments.