Sunday, June 30, 2019

Schneider Electric Reassures On Margins, But Macro Remains A Risk

Schneider Electric (OTCPK:SBGSY) has continued to do reasonably well, slightly outperforming the broader industrial group since its first quarter earnings release and pulling ahead of the group on a trailing twelve-month basis. With the company’s Wednesday investor day in the books, the company took the opportunity to reiterate and further explain its margin improvement targets, as well as outline some key longer-term growth opportunities like data centers and smart factories.

I liked Schneider before, and I still like it now, though valuation is more “okay” than exciting. While success on its margin improvement efforts could drive another point on the forward EV/EBITDA ratio, the near-term trading is likely to be more concerned with the macro environment, as Schneider is vulnerable to a slowdown in Europe, decreased capex in China, and a slowing U.S. market.

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Schneider Electric Reassures On Margins, But Macro Remains A Risk

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