Bank of America continues to back three European industrial companies with Buy ratings, asserting that the market sell-off has left their valuations pricing in excessively bearish outcomes. The bank highlights exposure across several structural growth areas including data centers, energy infrastructure and electrification as supporting fundamentals for these names.
Siemens Energy
BofA expects Siemens Energy to capture demand that is expanding beyond data centers into wider electricity markets. The company’s most recent quarterly results showed robust global electricity demand, with the United States identified as the principal source of order growth. A notable operational milestone was the wind division delivering its first profitable quarter in years. Management has said margins are moving toward the upper end of previously communicated guidance ranges. Following the recent share price decline, BofA judges that the market is applying overly bearish assumptions about data center demand and therefore retains a Buy rating on the stock.
Prysmian
Prysmian, the cable manufacturer, is positioned at the intersection of energy and data infrastructure and has taken strategic steps to broaden its role in data center supply chains. The company’s acquisition of Molex and its expansion of Digital Solutions capacity are cited as moves that strengthen its leadership in cabling. The purchase of Atkore further embeds the business into the data center ecosystem. Management reports that underlying business fundamentals have not deteriorated and that data center demand is expected to underpin performance in the second half of the year. BofA views current market pricing as reflecting harsh bear-case scenarios and maintains a Buy recommendation.
Schneider Electric
Schneider Electric is described by BofA as benefitting from broad-based and increasingly durable demand from data centers. Company management indicated that revenue visibility has extended into 2027 and 2028, accompanied by healthy demand across all four of its end markets and another record backlog. While demand from U.S. hyperscalers remains strong, growth in the recent period was mainly driven by China and East Asia. The company is also layering in software capabilities through its acquisitions of Cognite and PTC. After the most recent market correction, BofA believes valuation reflects unduly pessimistic scenarios and has reiterated a Buy rating.
Bottom line
BofA’s continued Buy stance on these three industrial stocks rests on the view that their operational trajectories and demand exposure to structural growth themes are not reflected in current share prices, which the bank sees as pricing in severe downside cases.