Purchases on Prysmian after heavy start, guidance confirmation rewarded

(Il Sole 24 Ore Radiocor) - After a heavy start for Prysmian, the stock cut its losses and moved to the top of the FTSE MIB. This morning, with the markets still closed, the company released its first-quarter accounts, which saw net profit rise 63% to EUR 253 million, revenues to EUR 5.21 billion (+5%), and theconfirmation of the 2026 guidance. What disappointed was the ebitda figure, which was below analysts' expectations. In particular, according to Intermonte, the company reported "solid revenue results but with an ebitda 2% below consensus at EUR 601m, compared to the consensus of EUR 612m and our estimate of EUR 608m".

For its part, the company pointed out that the ebitda was affected by a negative impact of exchange rates of EUR 36 million. In the same vein are the experts at Jefferies. "First quarter ebitda," they explain, is "slightly below expectations, penalised by much lower growth in the Transmission segment, which is however expected to accelerate in the coming quarters thanks to the commissioning of new production capacity, also favouring further margin expansion. The HV order backlog took a further leap forward. The recovery of Power Grids margins is lagging, but offset by a strong growth momentum. Electrification margins are in line, with potential upside still linked to tariffs. Margins improved for Digital Solutions, with Prysmian in negotiations for additional capacity. 2026 guidance is confirmed, as expected'. The targets set see adjusted ebitda in the range of EUR 2.62 to 2.77 billion and free cash flow in the range of EUR 1.3 to 1.4 billion. Jefferies also focuses on the fact that the group is in negotiations for long-term commercial agreements with customers to capture data centre growth, including new opportunities in the so-called 'white space'.

In this regard, during the call with analysts, Prysmian's CEO Massimo Battaini explained that "we are close to concluding long-term agreements with hyperscalers for the development of the optical business both inside buildings and in long-distance connections between data centres", highlighting that also thanks to the expected developments in this business segment "we believe we can significantly exceed the midpoint of the guidance for 2026". In addition, the top manager announced that "on the cash utilisation front, the market environment offers important opportunities for both organic growth and M&A operations. In particular, digital solutions and fast-growing segments, such as North America and broadcasting, require significant investments to increase capacity'.

Equita also focuses on EBITDA. "Prysmian - explain the brokers - closed the first quarter with an adjusted ebitda of -3% below our expectations (-2% below consensus estimates). The main difference was attributable to the Electrification business (-21 million versus our estimate), which was impacted by the negative impact of the Automotive, Elevators and O&G business. The other sub-segment (I&C) remains strong and supported by the DC business in North America. In line with expectations the Transmission business and the Power Grid business, which continued to suffer from the temporary impact of higher metal costs (improvement expected in Q2). The Digital Solutions business was very strong and better than expected (+6million over our estimate) with margins at 1.5% . Overall, the company reported margins of 11.5% (14.2% at standard metal prices) compared to 11% in Q1 2025'. Finally, Banca Akros focuses on 2026 guidance: "the beginning of the year was slower than expected. We believe Prysmian will need to accelerate operations in the Transmission segment and recover margins in Electrification to achieve full-year 2026 guidance".