(BFM Stock Exchange) – The American bank has noted its “neutral” recommendation to “buy” on the title due to a resumption of the growth of its order book and its exhibition at the German recovery plan.

A little more than a year after having decided to stay away from Nexans, Goldman Sachs changes gear.

The American bank noted its “neutral” advice to “buy” this Friday, July 11 and enhance its price target from 112 euros to 125 euros, a target which grants around 15% potential compared to Thursday’s closing course.

The establishment had increased to “neutral” on the second European cable manufacturer (behind the Italian Prysmian) in August 2024, worried about the visibility on the company’s order book, and the future of the “Great Sea Interconnector” contract (GSI).

This contract of 1.4 billion euros won in 2023 by Nexans relates to the supply of submarine cables for an electrical interconnection between Greece and Cyprus. But political and geopolitical risks have cast doubt on the execution of this contract.

In March, Nexans had denied press information according to which one of his customers had suspended payments due to the presumed interference of Turkey. On the contrary, the group claimed to have been paid and assured that it was making the cable.

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An exhibition at the recovery plan in Germany

Now, Goldman Sachs sees several reasons to become more positive again on action. The American bank quotes recent taking of contracts in the high voltage which make the Nexans order book has set sail for growth. These contract gains also allowed the group to improve the rate of use of its high -voltage industrial capacities.

The Bank also estimates that Nexans presents a more robust growth profile than that of its sector, the “Goods capital” (equipment goods), tabbling an average annual growth of 6.8% over the next five years against 4.9% for this compartment.

Then, Goldman Sachs argues that the group is relatively protected from economic uncertainties in the United States and in China because its portfolio remains above all European. On this last point, the bank notes that Nexans is, among all European companies in its sector, the best exposed to the German budget recovery plan, with in particular an exposure of 13% to the country overall, and 22% of construction, 19% to infrastructure and 2% in defense.

Goldman Sachs also notes that the valuation of the company is “depressed” and that the market has now “largely” integrated the risks linked to the GSI project.

The change of advice from Goldman Sachs only moderately carries Nexans. The action opened up almost 2% but it only took 0.1% on the Paris Stock Exchange, this Friday, July 11, around 3:40 p.m. The title, however, clearly outperforms the CAC 40 which fell 0.8% at the same time.

Three weeks ago, Deutsche Bank initiated his advice on purchase on Nexans action, judging the attractive valuation while the group will soon complete its moult to become a “pure-player” of electrification.