Jefferies has outlined six themes it expects to play out across European midcap stocks into 2026 and flagged six companies it believes could capture the upside from those trends. The firm identifies factory automation, a sentiment recovery for temporarily weak names, stronger power demand tied to data centers and electrification, German domestic recovery plays, mispriced structural winners, and oversold cyclicals as the primary vectors for potential gains.
This note provides company-level detail on each of the brokerage’s picks and the rationale the analysts offered behind their selections.
Factory automation - Interroll
Interroll is singled out to profit from a recovery in warehouse automation demand. Jefferies cites reports from system integrators that show stronger order flow from e-commerce customers, a trend that typically flows through to suppliers such as Interroll in later cycles. For the first half of 2024 Interroll recorded a 1.2% increase in sales to CHF 265.1 million and reported a 10.5% rise in net profit. The brokerage also notes that UBS upgraded the company’s rating to 'Buy', reflecting a brighter market outlook.
Sentiment-change idea - InPost
InPost is presented as a sentiment-change candidate that stands to benefit as investor confidence returns. The company is expected to continue taking market share in Poland despite competition from Allegro, while also pushing further expansion in France and the UK. Jefferies highlights InPost’s automated parcel machines as a delivery alternative that is more convenient, less costly and more environmentally friendly than traditional door-to-door delivery. The firm also notes InPost’s strategic partnership with Vinted, which aims to expand its parcel locker footprint across several European countries and should increase parcel volumes.
Data centers and electrification - Belimo
Belimo is recommended for its exposure to data-center cooling and related solutions. Jefferies argues the company could be re-rated from what analysts view as conservative 2026 guidance. Belimo reported a robust fiscal 2025 performance and continues to see the data center vertical as a major growth engine. The brokerage expects the adoption of Nvidia’s Blackwell architecture to speed liquid cooling uptake, which should drive orders into 2026 and 2027. Belimo confirmed full-year 2026 guidance that anticipates sales growth of 6-9% in local currencies, underpinned by continued strong demand from the data center sector.
German recovery plays - Bechtle
Bechtle is positioned as a key beneficiary of Germany’s fiscal stimulus, owing to its solid public sector footprint. After a relatively weak first half, the company extended positive momentum into the third quarter, reporting 5% year-over-year revenue growth to 1.6 billion and 21% earnings growth compared with the second quarter. In a move to bolster its positioning in France, Bechtle AG announced the acquisition of French IT services firm Prosol. Deutsche Bank recently maintained a 'Hold' rating on Bechtle.
Mispriced structural winner - Arcadis
Arcadis is highlighted as a long-term play trading at a significant valuation discount to peers. Jefferies notes the company is trading at about a 45% discount relative to engineering consultancy peers, a gap the analysts expect to narrow as revenues and profitability recover. Weakness in 2025, particularly in the UK which accounts for roughly 23% of Arcadis’s revenues, contributed to the discount. Arcadis reported a 5.3% increase in net revenue for the first quarter of 2024, and its operating EBITA margin rose to 10.2%, driven by improvements in its Resilience and Places business areas.
Oversold cyclicals - Sulzer
Sulzer is presented as an oversold cyclical with improving underlying trends. While 2025 was challenging due to large-scale project postponements, the company’s Water and Services divisions delivered double-digit growth. Jefferies expects that the order trough in Chemtech is approaching, and projects a more constructive 2026 based on easier year-on-year comparisons, potential margin improvement and what the analysts describe as an attractive valuation. The company also announced that CEO Suzanne Thoma will step down at the end of the year, and the board has started the process of appointing a successor.
Below are the primary takeaways, sectors impacted and notable uncertainties tied to the themes and individual names Jefferies identified.
Key points
- Factory automation and logistics - Industrial automation suppliers and logistics operators may benefit from recovering e-commerce and warehouse activity.
- Data-center driven equipment demand - Increased adoption of advanced AI hardware is expected to lift demand for specialized cooling and electrification solutions.
- Domestic stimulus and structural re-rating opportunities - German fiscal measures could favor IT and public-sector focused vendors, while some engineering and services firms trade at steep discounts that could compress as performance normalizes.
Risks and uncertainties
- Demand timing - Recovery in warehouse automation and cyclicals depends on the timing and persistence of end-market order flows; a slower-than-expected rebound would pressure suppliers and integrators.
- Project postponements - Large-scale project delays, as cited for Sulzer in 2025, can materially weigh on revenues and orders in engineering and Chemtech segments.
- Geographic concentration and competitive pressure - Firms with significant exposure to specific markets, such as Arcadiss UK revenue share or InPosts competition in Poland, face concentrated demand and rivalry risks that could hamper near-term recovery.
Jefferiess thematic framework maps to several market sectors including industrials, logistics, IT services, engineering consulting, HVAC and industrial services. The brokerages selected midcap names illustrate how those sectors could perform under scenarios of renewed automation investment, rising power needs from AI-enabled data centers, fiscal stimulus in Germany, and a normalization of cyclically weak end markets.