Al Root
Power-generation equipment and technology supplier Schneider Electric hit a few speed bumps this year, but its future looks as bright as ever.
On Thursday, the Paris-based peer of Eaton hosted a capital markets day, outlining its strategy and financial goals for investors. Management believes sales can grow by 7% to 10% annually through 2030, driven by rising worldwide demand for affordable electricity. And profit margins can improve by 2.5 percentage points over that span.
All that implies 2030 sales of about $69 billion and earnings before interest, taxes, and amortization, or Ebita, of about $14.5 billion. Wall Street projections for sales match Schneider's, but analysts' Ebita projection for the end of the decade is closer to $12 billion.
It isn't hard to justify the growth assumptions. In the U.S., power-hungry artificial-intelligence data centers are driving more electricity demand. In Europe, nations are focused on grid modernization to reduce costs and move toward energy independence.
At another analyst event this week, GE Vernova CEO Scott Strazik pointed out that, of the world's roughly $1.5 trillion in annual energy expenditure, only 20% is for electric power. That share is expected to grow, creating significant opportunities for power-generation equipment makers such as GE Vernova and electrical-technology suppliers like Schneider Electric.
That demand should translate to stock performance. In many instances, it has. Through Wednesday trading, GE Vernova stock was up 190% year to date. Schneider stock, however, was down a little.
A few things contributed to that divergence. For starters, Schneider is European, out of the view of some American investors. And U.S. tariffs weighed more heavily on Schneider than on its peers. The company has also had some turmoil at the top: It replaced its CEO in November 2024 with Olivier Blum.
Investors appear to be in a forgiving mood. They reacted well to the outlook, with Schneider stock up 2.9% in overseas trading on Thursday. The S&P 500 was down 0.4% and the Dow Jones Industrial Average was up 0.9%.
The year "has been challenging, but exciting at the same time," said CEO Blum, adding that he is confident that Schneider has the portfolio to help companies provide more power at reasonable costs.
"There is no AI without compute and no compute without energy," added Blum, which makes his company "a super exciting place to be."
Investors hope he's right.
Write to Al Root at allen.root@dowjones.com
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December 11, 2025 13:08 ET (18:08 GMT)
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