Deutsche Bank on Friday upgraded Prysmian SpA (BIT:PRY) to a "buy" from "hold" and raised its price target to €167 from €100, arguing the Italian cable and fiber maker is well positioned to benefit from rising demand tied to artificial intelligence infrastructure expansion.
Analyst rationale
Analyst Nabil Najeeb said Prysmian sits "at the intersection of three of the key bottlenecks emerging across the value chain: grid infrastructure, MV cabling into data centers, and optical fiber for server and data center interconnect." Deutsche Bank's upgrade follows a period in which the brokerage said earnings momentum has resumed after a brief pause, with the trajectory now "firmly re-accelerating."
Market context and valuation
The stock last closed at €143.65, which Deutsche Bank notes implies roughly 16% upside to its new €167 target. The bank pointed to a structural shift in AI workloads - specifically toward inference - that has increased intra- and inter-data center bandwidth and latency needs, a dynamic the firm says has contributed to a sharp rise in fiber prices.
Competitive positioning
Deutsche Bank emphasized Prysmian's advantage as one of the limited number of fiber producers with a domestic U.S. manufacturing footprint, a factor the bank believes positions the company to capture pricing and volume upside in fiber markets. The brokerage also said Prysmian is close to announcing sizable long-term agreements with hyperscalers intended to underwrite fiber capacity expansion.
Summary
Deutsche Bank upgraded Prysmian to "buy" and lifted its price target to €167 from €100, citing intensified demand for fiber and MV cabling from AI-driven data center buildouts. The firm highlighted Prysmian's U.S. manufacturing presence and potential long-term contracts with hyperscalers, and noted earnings momentum has resumed.
Key points
- Prysmian upgraded to "buy" from "hold" by Deutsche Bank, target raised to €167 from €100.
- Analyst Nabil Najeeb says the company sits at the intersection of grid infrastructure, MV data-center cabling, and optical fiber for server and data center interconnect.
- Shift toward AI inference workloads has driven higher bandwidth and latency requirements, supporting a sharp increase in fiber prices; Prysmian's U.S. manufacturing footprint and potential hyperscaler agreements are cited as advantages.
Risks and uncertainties
- The company’s upside depends in part on execution of long-term agreements with hyperscalers that Deutsche Bank says are near announcement; the timing and terms of such agreements add uncertainty.
- Future earnings momentum is described as having "resumed" after a pause, indicating the potential for variability in results if market conditions change.
- Rising fiber prices are a cited driver of value, but pressure on bandwidth and latency requirements could evolve, affecting demand and pricing dynamics.
Investors seeking to follow the stock should note the brokerage’s view that Prysmian is strategically positioned in several bottleneck areas of the supply chain for data-center and grid builds, while recognizing the execution and market risks highlighted above.