On Wednesday, Legrand SA (EPA:LEGD) (LR:FP) (OTC: LGRDY), a global specialist in electrical and digital building infrastructures, had its price target slightly reduced from EUR104.00 to EUR103.00 by Jefferies, while the firm maintained a Hold rating on the stock.
The adjustment follows an update to the Low Voltage proxy database, which indicated a notable increase in European product volumes, especially in France and Italy. This uptick was somewhat balanced by weaker performance in Germany and the United Kingdom.
The report noted that although complete data for June was not available, April experienced a robust 6% year-over-year volume growth, contrasting with a 3% decline in the first quarter. This recent development suggests that the market consensus for Legrand's organic growth might be underestimated, currently standing at -2%, whereas Jefferies projects a potential 2% increase.
Despite the positive signs in Europe, the price target revision was influenced by less optimistic projections for the United States. Jefferies has adjusted its EBITA (Earnings Before Interest, Taxes, and Amortization) forecast for the year 2024 downward by 1%, leading to the new price target of EUR103.00 for Legrand's shares.
InvestingPro Insights
For investors keeping a close eye on Legrand SA (OTC: LGRDY), current metrics from InvestingPro reveal a nuanced picture of the company's financial health and market position. With a market capitalization of $27.4 billion and a P/E ratio of 23.13, reflecting a slight adjustment from the last twelve months as of Q1 2024 to 22.16, Legrand presents an interesting case for potential investors. The company's impressive gross profit margin of 52.26% underscores its ability to maintain profitability, a factor that might reassure investors despite the recent revenue decline of -2.6% over the last twelve months as of Q1 2024.
Investors may also take note of the company's dividend track record. Legrand has not only raised its dividend for 4 consecutive years but has maintained dividend payments for 19 consecutive years, signifying a strong commitment to shareholder returns. Additionally, two analysts have recently revised their earnings expectations upwards for the upcoming period, indicating a potential positive shift in the company's financial trajectory. These InvestingPro Tips, along with many more, are available to subscribers, and for those interested, using the coupon code PRONEWS24 can provide up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. In total, there are 9 additional InvestingPro Tips available for Legrand, which provide further detailed analysis and investor guidance.
As Legrand navigates the varying market conditions across Europe and the United States, these insights can help investors form a more comprehensive view of the company's prospects. The next earnings date, set for July 31, 2024, will be an important event for stakeholders to gauge whether the positive European trends are translating into broader financial success for Legrand.
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