On Wednesday, Schneider Electric SE (EPA:SCHN:FP) (OTC: SBGSY) received an updated price target from UBS, indicating a positive outlook for the company's financial future. The price target was raised to €250 from the previous €207, while the firm maintained a Buy rating on the stock.
"Despite the recent rally and re-rating, we continue to see further upside potential driven primarily by double-digit EPS growth, thanks to a combination of high single digit organic growth and margin expansion," said UBS analysts.
The firm's confidence is based on the company's potential for continued EPS growth. Adjustments were made to the 2024-2025 adjusted EBITA estimates, with a slight decrease of 1-2% due to foreign exchange impacts and disposals. However, the 2026 forecast remains unchanged.
The UBS analyst's estimates for Schneider Electric stand 2% above the consensus for the year 2025 and 4% for 2026, aligning with the consensus for 2024. The increase in the target price to €250 is justified by a higher mid-cycle growth assumption, moving from 5% to 6%, and an extension of the mid-cycle growth period. This adjustment reflects the multi-year secular growth drivers present across most of Schneider Electric's portfolio.
InvestingPro Insights
Schneider Electric SE (OTC: SBGSY) has been under the spotlight following a bullish price target update from UBS. To add context to this positive outlook, InvestingPro provides some key metrics and insights that can help investors understand the company's current financial standing and market performance.
As of the last twelve months leading up to Q4 2023, Schneider Electric boasts a significant market capitalization of $130.45 billion, underscoring its prominence in the Electrical Equipment industry—an aspect also highlighted by one of the InvestingPro Tips. The company's P/E ratio stands at 28.67, which is relatively high and indicates that investors may expect high earnings growth in the near future. This aligns with the UBS analysts' expectations for double-digit EPS growth.
InvestingPro Data also shows a steady revenue growth of 5.05% for the same period, which may be reflective of the high single-digit organic growth mentioned by UBS analysts. The firm's dividend yield is currently at 1.15%, and it has a track record of raising its dividend for 9 consecutive years, a testament to its financial health and commitment to shareholder returns.
Investors should note that the company is trading near its 52-week high, with the price at 98.3% of this peak. This could be indicative of strong market confidence, which is further supported by an impressive six-month price total return of 39.9%.
For those interested in a deeper dive, there are additional InvestingPro Tips available for Schneider Electric, including insights on the company's moderate level of debt and low price volatility. To explore these tips and more, visit https://www.investing.com/pro/SBGSY. For a limited time, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, where you can find a total of 14 InvestingPro Tips to inform your investment strategy.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.