(Reuters) -Shares of Legrand gained more than 8% in early trading on Thursday, after the French electrical and digital building infrastructure group hiked its annual sales target driven by strong growth in the data centre segment in North America.
Tech companies, led by those in the U.S., are investing heavily in data centres to meet surging demand for data-hungry artificial intelligence models.
Legrand lifted the revenue growth target to between 10% and 12%, from the previously forecasted 6-10%. The revised outlook assumes organic growth of 5-7% and growth of around 5% from acquisitions, it said.
Its consolidated sales rose by 13.4% to 4.77 billion euros ($5.53 billion) in the first half of 2025, beating analysts’ average forecast of 4.66 billion euros.
Legrand’s shares top France’s CAC40 blue-chip index, followed closely by its rival Schneider Electric.
“We note … that data center (activity) remains a lumpy and important driver of quarter-to-quarter growth, so the guidance strikes us as pragmatic, which is in keeping with management’s style,” J.P.Morgan analysts wrote in a note to clients.
Analysts from RBC Capital Markets also highlighted that Legrand’s management team is known to be conservative.
“It looks potentially like there is now further upside to management’s 15-20% full-year growth guidance in data centres,” they said in a note.
($1 = 0.8633 euros)
(Reporting by Mateusz Rabiega in Gdansk, editing by Milla Nissi-Prussak)
