Investing.com-- Bank of America highlighted three Buy-rated European industrial stocks that stand out in the sector, despite recent market volatility that has pushed valuations down to levels that may reflect overly pessimistic scenarios.
The bank maintains Buy ratings on all three companies, noting that current share prices appear to factor in harsh downside cases even as the firms demonstrate solid operational performance and strong demand fundamentals. Each company has exposure to key growth areas including data centers, energy infrastructure, and electrification.
Siemens Energy
Siemens Energy is expected to benefit from demand expanding beyond data centers to broader electricity markets. The company's latest quarterly results revealed strong global electricity demand, with the U.S. serving as the primary driver of orders. Notably, the wind division achieved its first profitable quarter in years. Management indicated that margins are tracking toward the upper end of guidance ranges. Following a recent sell-off, BofA believes the stock's valuation reflects overly bearish assumptions about data center demand and reiterates its Buy rating.
Prysmian
The cable manufacturer positions itself as connecting both energy and data infrastructure, with recent strategic moves extending its reach into data centers themselves. The company's acquisition of Molex and expansion of Digital Solutions capacity strengthen its leadership position in the cable sector, while the Atkore purchase deepens its presence in the data center supply chain. Management reports that underlying business fundamentals remain unchanged, with data center demand expected to support performance in the second half of the year. BofA views current valuation as reflecting harsh bear-case scenarios and maintains a Buy rating.
Schneider Electric
The company benefits from broad-based and increasingly durable data center demand. Management highlighted growing visibility extending into 2027 and 2028, with healthy demand across all four end markets and another record backlog. While strong U.S. hyperscaler demand persists, growth was primarily driven by China and East Asia. The company is also building out a software layer through its acquisitions of Cognite and PTC. After the recent market sell-off, BofA believes valuation prices in overly pessimistic scenarios and reiterates its Buy rating.
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Original Article
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