Prysmian: Connecting Electricity To AI, AC, And EVs

Ricardo Fernandez
2.68K Followers

Summary

  • Prysmian is a leading electric cable manufacturer that may see over 20% free cash flow growth as it captures high voltage, grid, and data center demand.
  • The Italian-based companies' recent acquisition in the US shields it from some of the copper tariffs and adds growth and margins.
  • Trading at under 1x PEG my US$54 price target (PRYMY) has 35% upside potential and a 5% capital return yield.
  • The main risks are raw material cost, import tariffs, and a drop in AI/data center capex demand.

Inside the new factory manufacturing electrical cable. Cable production.

FabrikaCr/iStock via Getty Images

Introduction

About five years ago, when the electrification, decarbonization, and electric vehicle trends were beginning, I thought about what this would mean for the electric energy sector. Naturally, more power plants will be needed, as well as demand for transmission and grid

This article was written by

2.68K Followers
Experience is difficult to learn. After 30 plus years of critically analyzing the nuts and bolts of businesses as diverse as airlines, oil, retail, mining to fintech and ecommerce plus the macro, monetary and political drivers. I continue to immensely enjoy learning and applying my experience to unravel, comprehend and benefit from new ideas, technology, innovation and business models. In addition, living through multiple crises, tequila, Asia, dotcom, 9/11, the great recession and the Covid19 pandemia, plus a stint at entrepreneurialism (Export, Factoring and Printing) provides for an extraordinary base of experience to be applied across multiple disciplines.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of PRYMY, TLN, EXE either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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