Prysmian in the spotlight as the market welcomes the 5.5 billion deal to supply cables for data centres

(Il Sole 24 Ore Radiocor) - It’s making good progress Prysmian is currently one of the best-performing shares on the Milan main index (FTSE MIB ). The share price is rising following this morning’s announcement – made whilst the markets were still closed – of a ten-year agreement worth up to €5.5 billion with Molex, part of the large US private group Koch, for the supply of optical cables for use within data centres.

Specifically, the agreement forms part of a broader plan involving new agreements and commercial initiatives with hyperscalers and data centre infrastructure operators, which is expected to generate, by 2035, over 10 billion in cumulative incremental revenue compared with 2025, adding up to 1.1 billion in annual revenue from 2031 onwards. To support this growth, Prysmian will increase its production capacity for fibre and optical cables, more than doubling its fibre capacity in the United States compared with current volumes. Specifically, 1.25 billion in additional investment is planned up to 2031. 

According to analysts at Intermonte (which has a ‘Neutral’ rating on the share and a target price of 116 euros), the figures announced – both regarding the estimate of additional revenue over the next 10 years from hyperscalers and data centre infrastructure operators (€1.1 billion in incremental annual revenue from 2031), and regarding investments in production capacity (€1.25 billion cumulatively by 2031) “are in line with management’s expectations. We estimate that the additional revenue from data centres will have an EBITDA margin run-rate of 25 per cent, equivalent to approximately €250 million in additional annual EBITDA in 2031 (6–7 per cent of the group’s total)’. For its part, Equita (which has a ‘Buy’ rating on the share with a target price of €178) points out that the timing of the overall economic impacts prior to 2031 has not been specified, ‘such as the roll-out of the agreement with Molex’. Furthermore, according to the experts, “the increase in production capacity is in line with expectations, as is the scale of the contract with Molex. In our model, we have estimated approximately 800 million in additional sales from agreements with DC hyperscalers through to 2029. Overall, we consider the information provided to be positive and supportive, with Prysmian offering visibility into strong future growth in the DC sector (optical cables in particular)”.