Legrand, an “AI” stock that is still cheap?The Legrand stock, a French company listed on the Paris Stock Exchange, is following a strong long-term bullish trend in the equity markets. The company is a pure specialist in building electrical infrastructure and has made a massive strategic shift in recent years toward AI data centers and digital infrastructure in general.
This transformation has enabled Legrand to reach record operating margins and achieve excellent current and future profitability.
So one question arises: is it still time to buy Legrand shares?
Legrand is currently benefiting from an extremely favorable structural trend: the explosion of electricity demand linked to the global digital transformation. The development of generative artificial intelligence is driving spectacular growth in investments in data centers, which require increasingly efficient, secure, and resilient electrical infrastructures.
The French group is particularly well positioned in this market thanks to its low-voltage electrical distribution solutions, cabling systems, equipment for computer rooms, and smart building management solutions. This exposure to data centers is gradually bringing Legrand closer to the artificial intelligence theme, even though the company does not directly manufacture AI chips or software.
The quality of Legrand’s business model is also based on strong innovation capabilities, a portfolio of globally recognized brands, and a targeted acquisition strategy that regularly expands its technological offering.
The table below compares LEGRAND shares with its European competitors based on the forward P/E valuation criterion. LEGRAND stock is the cheapest of all and has strong earnings growth prospects thanks to AI data centers.
Regarding valuation, Legrand remains cheaper than several major European competitors exposed to the same electrification and digitalization trends. With a forward price-to-earnings ratio of around 20 times expected earnings, the stock can still be considered inexpensive within its sector.
The chart below displays weekly Japanese candlesticks for LEGRAND shares together with stock market valuation ratios: forward P/E, P/E ratio, and Price-to-Sales. A forward P/E of 20 can be considered reasonable in the AI sector (here, data centers).
With a strategic position at the heart of the energy and digital revolution, Legrand could therefore remain one of the most attractive European companies to indirectly benefit from the development of artificial intelligence.
The chart below represents the same data as the previous chart but adds the Ichimoku system. You can observe that the weekly Ichimoku cloud is acting as support.
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