Barclays has initiated coverage of Belimo Holding AG with an "overweight" recommendation and a CHF 1,000 price target, which implies roughly 38.6% upside from the stock's CHF 721.5 close on Tuesday. The bank singled out the firm's exposure to data center liquid cooling as a material, underrecognized source of growth.
Following the publication of the note, Belimo shares climbed 5.68% to CHF 762.5 on Wednesday as of 07:42 ET (11:42 GMT).
Barclays notes that data centers account for approximately 20% of Belimo's sales, and that about 80% of that data-center exposure is linked to liquid cooling technologies. The broker expects the liquid-cooling segment to be a rapid-growth engine as AI-driven, power-dense data centers are rolled out.
Specifically, Barclays forecasts the liquid-cooling segment to achieve about 60% average annual sales growth over 2026-2028, attributing that pace to accelerating deployment of high-power AI facilities. Management's own estimate of addressable content per facility ranges from CHF 40,000 to CHF 60,000 per megawatt, with liquid cooling sitting at the upper end of that band, according to the note.
Barclays' group revenue projections for Belimo rise from CHF 1.12 billion in 2025 to CHF 1.32 billion in 2026, CHF 1.61 billion in 2027 and CHF 1.91 billion in 2028. That sequence equates to a compound annual growth rate of 19.5% across the period. The bank expects adjusted EBITDA margin to expand to 27.8% in 2028 from 24.2% in 2025, reflecting operating leverage as sales accelerate.
On the earnings front, Barclays projects diluted earnings per share of CHF 18.76 in 2026, CHF 24.17 in 2027 and CHF 30.02 in 2028, which implies a three-year EPS compound annual growth rate of 26.7%.
Barclays also highlighted where its forecasts diverge from consensus. The broker said its 2028 adjusted EBIT estimate is roughly 30% higher than Bloomberg consensus, while its revenue forecasts exceed consensus by 4% for 2026, 11% for 2027 and 20% for 2028. The largest single difference versus consensus relates to Americas organic growth, where Barclays models 35% growth in 2026 compared with consensus expectations of 25%.
"We think the market overlooks 1) the magnitude of demand ahead for liquid cooling as more power-dense AI data centers are deployed, 2) the operating leverage within Belimo that should drive a significant read-through from the top line to earnings, with liquid cooling sales also mix accretive, and 3) demand in Americas where we think strong demand from data centers will be married with solid commercial HVAC activity," Barclays said.
On valuation, Barclays derived its CHF 1,000 price target by applying a 100% premium to its target sector 2028 EV/EBITA multiple, which it places at about 13x. As an alternate check, the bank said applying roughly 9x sales to Belimo's estimated 2027 revenue - a multiple it referenced alongside recent strategic transactions - implies that the remaining legacy HVAC business would trade at about 4x sales. Barclays noted that a 4x sales valuation is broadly in line with Carrier Global, Trane Technologies and Johnson Controls International.
Barclays further observed that on two-year forward consensus price-to-earnings, Belimo trades at roughly a 65% premium to the STOXX Europe 600 Industrial Goods & Services Index. The bank said that premium is the lowest since the pandemic and is below the pre-ChatGPT five-year average premium of 105%.
The brokerage's cash-flow and capital-efficiency forecasts show free cash flow of CHF 127 million in 2026, CHF 129 million in 2027 and CHF 296 million in 2028, with return on invested capital projected to reach 40.1% by 2028.
The note therefore sets out a scenario in which rapid penetration of liquid cooling in AI-focused data centers, together with operating leverage and stronger Americas activity, drive significant revenue, margin and cash-flow expansion for Belimo through 2028.
Market impact and context
Barclays' initiation links Belimo's near- to medium-term outlook closely to demand for liquid cooling systems in power-dense AI data centers, and to the company's ability to translate top-line gains into margin and earnings expansion through operating leverage and a mix shift toward higher-value cooling products.