ADR Price
$43.20
May 31, 2026
Price Target
$50.00
+16% upside — BUY
Market Cap
€135B
~$146B USD
FY26E Revenue
€44.0B
+13.7% YoY
Adj EBITA Margin
20.9%
FY26E
Dividend Yield
1.7%
~€3.65/share FY25
P/E (FY26E)
22x
vs. 35x+ US peers
EV/EBITDA
18x
FY26E
FCF Yield
4.2%
FY26E
Business Overview
Schneider Electric (Euronext: SU; OTC: SBGSY) is the global leader in energy management and industrial automation. Operating in 100+ countries with 150,000+ employees, the company serves data centers, industrial facilities, buildings, and utilities. Its EcoStruxure platform integrates IoT, AI, and cloud software with hardware products ranging from low-voltage breakers to medium-voltage switchgear and SCADA systems. Data center exposure has become the dominant growth engine, accounting for an estimated 30%+ of group revenue and growing at 25–30% annually.
Energy Management
€26.6B
~68% of revenue • adj EBITA ~22%
LV & MV switchgear, UPS, EV charging, grid automation, building mgmt, data center PDUs & cooling
Industrial Automation
€11.9B
~30% of revenue • adj EBITA ~17%
AVEVA software, PLCs, motion control, SCADA, process automation for factories & energy firms
Data Center End-Market
~€12B
~30% of group revenue (cross-segment)
PDUs, cooling, UPS, switchgear for hyperscaler, colocation & enterprise AI buildouts
EcoStruxure Platform
~€4.5B
Software & services growing 15%+
AI-powered energy optimization, digital twin, predictive maintenance & DCIM solutions
Income Statement Forecast (€B)
| Metric | FY2023A | FY2024A | FY2025A | FY2026E | FY2027E | FY2028E |
|---|---|---|---|---|---|---|
| Revenue | 35.9 | 37.7 | 38.7 | 44.0 | 50.5 | 57.8 |
| YoY Growth | 12.7% | 5.0% | 2.7% | 13.7% | 14.8% | 14.5% |
| Gross Profit | 17.6 | 18.7 | 19.5 | 22.6 | 26.3 | 30.3 |
| Gross Margin | 49.0% | 49.6% | 50.4% | 51.4% | 52.1% | 52.4% |
| Adj EBITA | 6.28 | 7.09 | 7.82 | 9.20 | 10.81 | 12.48 |
| Adj EBITA Margin | 17.5% | 18.8% | 20.2% | 20.9% | 21.4% | 21.6% |
| D&A | 1.52 | 1.60 | 1.70 | 1.82 | 2.00 | 2.20 |
| Adj EBITDA | 7.80 | 8.69 | 9.52 | 11.02 | 12.81 | 14.68 |
| EBITDA Margin | 21.7% | 23.1% | 24.6% | 25.0% | 25.4% | 25.4% |
| Net Income (adj) | 4.16 | 4.92 | 5.44 | 6.38 | 7.49 | 8.67 |
| Adj EPS (€) | 7.35 | 8.67 | 9.58 | 11.25 | 13.20 | 15.28 |
| DPS (€) | 3.20 | 3.45 | 3.65 | 3.90 | 4.20 | 4.55 |
| Payout Ratio | 43.5% | 39.8% | 38.1% | 34.7% | 31.8% | 29.8% |
Balance Sheet & Cash Flow Highlights (€B)
Balance Sheet
| Item | FY2024A | FY2025A | FY2026E |
|---|---|---|---|
| Cash & Equivalents | 4.8 | 5.2 | 6.1 |
| Total Assets | 58.4 | 60.2 | 66.8 |
| Gross Debt | 11.6 | 11.0 | 10.5 |
| Net Debt | 6.8 | 5.8 | 4.4 |
| Net Debt / EBITDA | 0.78x | 0.61x | 0.40x |
| Shareholders Equity | 24.6 | 26.8 | 30.0 |
| Return on Equity | 20.0% | 20.3% | 21.3% |
Cash Flow Statement
| Item | FY2024A | FY2025A | FY2026E |
|---|---|---|---|
| Operating Cash Flow | 5.8 | 6.5 | 7.8 |
| Capex | (1.4) | (1.5) | (1.6) |
| Free Cash Flow | 4.4 | 5.0 | 6.2 |
| FCF Margin | 11.7% | 12.9% | 14.1% |
| FCF Conversion | 89% | 92% | 97% |
| Dividends Paid | (1.96) | (2.07) | (2.21) |
| Share Buybacks | (0.80) | (1.00) | (1.50) |
Financial Charts
Revenue (€B) & Adj EBITA Margin — FY2023–FY2028E
ADR Price History & Price Target
Valuation Framework
Price Target Derivation
| Method | Weight | Value |
|---|---|---|
| EV/EBITDA (20x FY26E) | 35% | $50.50 |
| P/E (25x FY26E Adj EPS) | 35% | $51.80 |
| DCF (WACC 8%, g 3.5%) | 20% | $49.20 |
| EV/Sales (3.1x FY26E) | 10% | $47.50 |
| Blended Price Target | 100% | $50.00 |
Key Valuation Metrics
| Metric | FY25A | FY26E | FY27E |
|---|---|---|---|
| P/E (Adj) | 23.1x | 20.8x | 17.7x |
| EV/EBITDA | 21.8x | 18.4x | 15.8x |
| EV/Sales | 5.4x | 4.7x | 4.1x |
| P/FCF | 29.0x | 23.8x | 20.3x |
| Div Yield | 1.7% | 1.8% | 2.0% |
| PEG Ratio | 1.4x | 1.3x | 1.1x |
Peer Comparison Table
| Company | Market Cap | Rev Growth | Adj EBITA Mg | P/E FY26E | EV/EBITDA | FCF Yield | Div Yield |
|---|---|---|---|---|---|---|---|
| SBGSY (Schneider Electric) | €135B | +13.7% | 20.9% | 20.8x | 18.4x | 4.2% | 1.7% |
| Eaton (ETN) | $145B | +8.2% | 22.1% | 32x | 26x | 2.9% | 1.0% |
| ABB Ltd (ABB) | $110B | +4.5% | 18.2% | 28x | 21x | 3.5% | 1.8% |
| Siemens (SIEGY) | €155B | +5.0% | 16.8% | 21x | 16x | 4.8% | 2.8% |
| Honeywell (HON) | $135B | +6.0% | 23.5% | 24x | 20x | 3.8% | 2.4% |
| Emerson Electric (EMR) | $70B | +7.5% | 24.0% | 25x | 19x | 4.1% | 2.1% |
| Legrand (LGRVF) | €22B | +5.5% | 20.5% | 22x | 17x | 4.5% | 2.0% |
| Peer Average | — | +6.1% | 20.8% | 25x | 20x | 3.9% | 2.0% |
Bull / Base / Bear Scenarios
▲ Bull Case
$68
+57% upside
Data center revenue accelerates to 35% of group on hyperscaler AI CapEx surge (Microsoft, Amazon, Google collectively spend $500B+ in 2026). Adj EBITA margin expands to 23%+ by FY27 via software mix and operating leverage. EcoStruxure platform achieves SaaS-like rerate to 30x P/E. Grid modernization drives Energy Management above-consensus. AVEC acquisition closes and integrates seamlessly.
◼ Base Case
$50
+16% upside
Revenue grows 13-15% in FY26E driven by data center and energy transition. Adj EBITA margin expands 70bps YoY to 20.9%. P/E re-rates from 21x to 23x on earnings growth and ESG capital flows. Industrial Automation recovers modestly as European manufacturing stabilizes. Dividend grows in line with earnings. ADR tracks underlying SU share appreciation plus EUR/USD tailwind.
▼ Bear Case
$32
-26% downside
AI CapEx pause following DeepSeek-style efficiency shock reduces hyperscaler data center orders 20%. European industrial recession deepens, dragging Industrial Automation below €10B. EUR weakens to 1.02 vs USD, punishing ADR holders. Margin expansion stalls at 19.5% due to pricing pressure and elevated input costs. Multiple compresses to 17x as growth decelerates below 8%.
Probability
Bull: 25%
AI infra supercycle
Probability
Base: 55%
Consensus view
Probability
Bear: 20%
Macro / CapEx risk
Exp. Value
$51.40
Probability-weighted
Time Horizon
12 Months
May 2027
Risk/Reward
2.5:1
Bull vs. Bear
Key Catalysts & Upcoming Events
Q2 2026
H1 2026 Earnings & Data Center Order Update
~July 30 earnings call expected to show 25-30% data center order growth. Any acceleration above 30% would be a significant positive catalyst. Watch for EcoStruxure software ARR disclosure.
HIGH
Q3 2026
European Grid Modernization Awards
EU Grid Action Plan allocating €584B through 2030 to modernize power infrastructure. Schneider is a top-3 beneficiary. Major contract awards expected across France, Germany, and Southern Europe in H2 2026.
HIGH
Ongoing
Hyperscaler AI CapEx Expansion
Microsoft ($80B+), Amazon ($100B+), Google ($75B+) AI infrastructure spend. Schneider power distribution and UPS products are on the critical path for every new GPU cluster. Order visibility 12-18 months.
HIGH
FY2026
Industrial Automation Recovery
AVEVA software bookings and on-premise automation cycle recovery as European PMI stabilizes. Margin recovery in IA segment from current ~17% toward 19% target would drive significant EPS upside.
MEDIUM
2026-2027
EcoStruxure Software Re-rate
As software & services revenue approaches €5B+ and becomes separately disclosed, analysts may apply SaaS multiples to this revenue stream, potentially adding €10-15 per ADR share to valuation.
MEDIUM
Policy
EU Industrial Policy & IRA-Equivalent
European Commission “Clean Industrial Deal” subsidy program, complementing US IRA, could direct €100B+ toward electrification and automation in which Schneider holds dominant market position.
MONITOR
Key Risks
HIGH
AI CapEx Pause / Hyperscaler Order Slowdown
If major cloud providers pause or defer data center buildouts (as seen briefly after DeepSeek R1 launch), Schneider revenue growth could decelerate sharply from 14% to mid-single digits. Data center is now ~30%+ of revenue, creating meaningful concentration risk. An AI efficiency breakthrough that reduces hardware needs would be most damaging.
HIGH
EUR/USD Currency Headwind for ADR Holders
SBGSY ADR represents EUR-denominated assets. If EUR weakens from 1.08 to 1.02 vs USD (as occurred in 2022), the ADR would lose 6% of value purely from currency translation, independent of business performance. US investors hold meaningful unhedged EUR exposure via this ADR.
MED
European Industrial Recession Deepening
Industrial Automation segment (30% of revenue) serves European manufacturing which remains in a mild contraction. If Germany enters a deeper recession, or if factory automation capex is cut materially, IA margins could deteriorate further below the current ~17% adj EBITA level, creating a drag on group earnings.
MED
Competition in Energy Management from New Entrants
Vertiv (VRT), Eaton (ETN), and ABB are all aggressively expanding in data center power. Mitsubishi Electric and emerging Chinese vendors are targeting MV switchgear in Asia. While Schneider benefits from an installed base and EcoStruxure ecosystem lock-in, pricing pressure in commoditized product lines could compress margins.
MED
Geopolitical & Trade Tariff Risk
US tariffs on European goods could indirectly affect Schneider through customer spending reductions in the Americas (22% of revenue). Escalation of EU-China trade tensions could impair Schneider China operations (~10% of revenue) and supply chain for rare earth components.
LOW
AVEVA Integration & Software Execution
Full integration of AVEVA (acquired 2023 for ~€9.5B) remains ongoing. Customer churn in AVEVA’s existing enterprise accounts and challenges in cross-selling EcoStruxure + AVEVA bundled software could disappoint growth expectations of 15%+ for the software segment.
Sentiment & Analyst Coverage
TipRanks SmartScore
8 / 10
Above average
Analyst Consensus
Strong Buy
18 Buy / 4 Hold / 0 Sell
Avg Price Target
€280 / $52
14 analysts covering
Insider Activity
Neutral
No notable open-market buys
Institutional Ownership
72%
~BNP Paribas, Vanguard top holders
Short Interest
1.4%
Very low borrow / no crowding
Options Sentiment
Bullish
30d call/put ratio 1.8x
ESG Score
AAA
MSCI highest-rated industrials
ADR Liquidity
Moderate
~$45M avg daily volume
Recent Analyst Actions
| Firm | Analyst Action | Target (€) | Date |
|---|---|---|---|
| Goldman Sachs | Initiated Buy | 295 | May 2026 |
| Morgan Stanley | Raised PT | 285 | Apr 2026 |
| JPMorgan | Overweight (reiterate) | 290 | Apr 2026 |
| Barclays | Raised PT | 278 | Mar 2026 |
| Deutsche Bank | Hold (reiterate) | 248 | Mar 2026 |
| UBS | Buy (reiterate) | 300 | Feb 2026 |
▶ Bottom Line — Investment Summary
Schneider Electric (SBGSY) is a rare combination: a dominant industrial infrastructure company with technology-grade growth drivers. The data center electrification megatrend is real, durable, and decades long — and Schneider sits at the physical layer that no AI model or software stack can bypass. Every GPU cluster needs power distribution, UPS, switchgear, and thermal management. Schneider makes all of it.
At 21x FY25 earnings, the stock trades at a 35-40% discount to US peers like Eaton (32x) and Vertiv (45x+) despite comparable or superior fundamentals. The discount reflects European-listed, ADR-format illiquidity premium and index underrepresentation in US portfolios — not fundamental inferiority. As earnings growth compounds at 16%+ annually and software mix improves, the valuation gap should close.
Our $50 price target implies 16% upside from current levels plus the 1.7% dividend yield for a 12-month total return potential of ~18%. In our probability-weighted framework, the expected value is $51.40. The risk/reward is asymmetric at 2.5:1 bull/bear. RATING: BUY — $50 PT.
At 21x FY25 earnings, the stock trades at a 35-40% discount to US peers like Eaton (32x) and Vertiv (45x+) despite comparable or superior fundamentals. The discount reflects European-listed, ADR-format illiquidity premium and index underrepresentation in US portfolios — not fundamental inferiority. As earnings growth compounds at 16%+ annually and software mix improves, the valuation gap should close.
Our $50 price target implies 16% upside from current levels plus the 1.7% dividend yield for a 12-month total return potential of ~18%. In our probability-weighted framework, the expected value is $51.40. The risk/reward is asymmetric at 2.5:1 bull/bear. RATING: BUY — $50 PT.
DISCLAIMER: This research report is produced by Market Buzz Portfolio Hub for informational and educational purposes only. It does not constitute investment advice, a solicitation, or an offer to buy or sell securities. The information herein is based on publicly available data and analyst estimates as of May 31, 2026. Forward-looking statements and projections are inherently uncertain. Past performance is not indicative of future results. SBGSY is an OTC ADR representing Schneider Electric SE shares; ADR holders face currency risk, liquidity risk, and potential differences in shareholder rights compared to direct Euronext SU shareholders. Always consult a qualified financial advisor before making investment decisions. Market Buzz is not registered as an investment adviser with any regulatory authority.