Goldman Sachs is optimistic about one of the Italian cable manufacturing giants: Prysmian. The investment bank said in a Jan. 2 research note that the company will benefit from strong secular demand trends and superior earnings visibility. Prysmian produces underground and submarine cables and systems for power transmission and distribution. Prysmian is one of the latest additions to Goldman Sachs’ “Conviction List – Director’s Cut,” which the firm says provides a “curated and active” list of 15-25 Buy-rated stocks in Europe. Goldman Sachs said the stocks were selected by a subcommittee in each region that “works with analysts in each industry to identify the best ideas that combine conviction, differentiated views and high risk-adjusted returns.” PRY-IT The 12-month trend of Prysmian Costa’s share price in 1Y points out that Prysmian has a backlog of about 18 billion euros ($18.9 billion) in high-voltage data centers and will be fully capacity-filled by 2028. Highest visibility,” she said, among her peers. Another plus for the company is that it has “the most diverse end markets,” with 88% of its business outside of high voltage, Costa wrote. The company also has higher exposure to reshoring risks in the United States, with 34% of its exposure in the U.S. construction, industrials and fiber sectors, she added. These factors are why Costa said she is “more confident” in Prysmian’s near- and medium-term prospects. Prysmian is listed on the Milan Stock Exchange in Italy and trades in the United States as American depositary receipts under the stock code PRYMY. Its shares have risen about 57% in the past 12 months. Goldman Sachs has a 12-month price target of €73 on the stock, giving the stock upside potential of about 14%. In addition to Prysmian, Goldman Sachs’ list of convictions also includes British telecommunications company BT Group and Finnish engineering services company Neste. Goldman Sachs has set a 12-month target price of BT Group at 290 pounds ($3.65) and Neste at 26 euros, with upside potential of about 97% and 100% respectively. —CNBC’s Michael Bloom contributed to this report.
