Key Points:
- Jefferies identified top European stocks in capital goods and infrastructure.
- Legrand is expected to grow thanks to booming data center demand.
- Siemens is streamlining operations to boost profits by 2027. Prysmian and NKT benefit from U.S. power grid and cable upgrades.
- Schindler and Assa Abloy show promise in construction and housing recovery.
European industrial stocks are looking good right now. Investment bank Jefferies released a new analysis highlighting companies poised to win big from global trends like the boom in data centers, power grid upgrades, and factory automation. The bank picked out several standout performers that investors should watch as the market heads deeper into 2026.
First up is Legrand. Jefferies predicts this company will see steady organic sales growth, largely because of its strong foothold in data centers. Right now, data centers make up a quarter of Legrand’s business, but analysts expect that figure to jump to 36% by 2030. As tech companies rush to upgrade their servers and infrastructure, Legrand stands to profit from price increases and higher volume.
Then there is Siemens. After spinning off parts of its business, the German giant is becoming a more focused industrial machine. Analysts believe Siemens is building a unique AI-enabled platform for industries. While 2026 might see some costs related to these changes, the bank expects profits to jump significantly starting in 2027 as the company becomes more efficient.
Similarly, Siemens Energy has huge potential. High demand for energy infrastructure allows them to maintain favorable pricing, which should lead to strong returns for shareholders through dividends and buybacks.
In the world of cables and power grids, Prysmian and NKT are the top choices. Prysmian has a massive advantage because it generates two-thirds of its earnings in the U.S., where the power grid needs a total overhaul to support new data centers. Record copper prices might actually help them gain market share. NKT is also growing fast, with analysts expecting it to deliver some of the best profit margins in the high-voltage sector by 2028.
Finally, Jefferies points to Schindler for elevators and Assa Abloy for security. Schindler is cutting costs to boost profit margins this year. Meanwhile, Assa Abloy is benefiting from a recovering housing market in the Nordics and the U.S., as consumer confidence returns and homeowners start spending on renovations again.
