Prysmian shares fall; Jefferies cuts its target price to 164 euros
(Il Sole 24 Ore Radiocor) - Selling pressure on Prysmian on the Milan Stock Exchange after Jefferies confirmed its ‘Buy’ rating but lowered its target price to 164 euros per share from the previous 180 euros. In detail, Jefferies’ report on the cable manufacturer is not entirely negative; on the contrary, it recognises the benefits of the Atkore acquisition “which is accretive and enhances Prysmian’s Electrification segment, thanks to clear commercial and cost synergies”.
Experts see “a path towards an EBITDA in excess of 5 billion euros by 2030, with new targets expected in early 2027”. “We forecast a further expansion in margins of around 300 basis points in the medium term,” the analysts continue, raising their estimates by 7–10 per cent “thanks to Atkore”, but are reducing “the multiple and, consequently, the target price, due to the mix and the downward revision of competitors’ valuations”. According to Jefferies, the valuation multiple “falls from 16x to 14x EV/EBITDA”, and for this reason the new target price is set at 164 euros, “which implies a total shareholder return of 34 per cent”. “The revision reflects the de-rating of competitors in the fibre-optic sector during the recent AI-related sell-off and the application of a lower multiple, given the greater weight of Electrification on the group’s EBITDA following the Atkore transaction,” the analysts explain.
Although the report also highlights some positive aspects, Prysmian’s share price is falling because the market is looking beyond the upward revision of estimates: the acquisition of Atkore boosts profits and growth prospects, but increases the weighting of the more cyclical Electrification segment and therefore, according to analysts, justifies a lower valuation multiple. Added to this are the more cautious estimates for Digital Solutions and the general de-rating of fibre-optic-related shares during the recent sell-off in artificial intelligence.
