Schneider Electric SE
PAR:SU
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Intrinsic Value
The intrinsic value of one SU stock under the Base Case scenario is 197.53 EUR. Compared to the current market price of 240.1 EUR, Schneider Electric SE is Overvalued by 18%.
The Intrinsic Value is calculated as the average of DCF and Relative values:
Valuation Backtest
Schneider Electric SE
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Fundamental Analysis
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Schneider Electric SE stands as a beacon of innovation in energy management and automation, dedicated to making the world a more sustainable place. Founded in 1836, the company has evolved significantly over the years, transitioning from its origins in machinery and steel to a global leader in digital transformation in energy and automated solutions. Today, Schneider Electric enables efficiency and sustainability for customers across a wide array of sectors, including residential, commercial, industrial, and infrastructure. With a commitment to sustainability at its core, Schneider Electric aims to address the world’s challenges regarding energy and resources, aligning with global trends tow...
Schneider Electric SE stands as a beacon of innovation in energy management and automation, dedicated to making the world a more sustainable place. Founded in 1836, the company has evolved significantly over the years, transitioning from its origins in machinery and steel to a global leader in digital transformation in energy and automated solutions. Today, Schneider Electric enables efficiency and sustainability for customers across a wide array of sectors, including residential, commercial, industrial, and infrastructure. With a commitment to sustainability at its core, Schneider Electric aims to address the world’s challenges regarding energy and resources, aligning with global trends towards decarbonization and digitalization.
For investors, Schneider Electric represents a compelling opportunity in a rapidly growing market. The company benefits from robust demand for its solutions as organizations worldwide strive to reduce their carbon footprints and enhance operational efficiency. Backed by a strong portfolio of brands, including products that control electric supply and automate systems, Schneider Electric offers an impressive blend of growth potential and stability. Its strategic investments in renewable energy and technology, coupled with a proven business model that emphasizes recurring revenue streams, position the company well for continued success. As global energy needs evolve and the push for sustainability intensifies, Schneider Electric stands ready to lead the way, making it an attractive consideration for forward-thinking investors.
Schneider Electric SE is a global leader in digital transformation of energy management and automation solutions. The company operates across several core business segments which include:
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Energy Management: This segment focuses on helping businesses and utilities manage and optimize their energy usage. It includes solutions for electrical distribution, energy monitoring, and management systems. Schneider offers products that facilitate safe and efficient power distribution, such as switchgear, circuit breakers, transformers, and software solutions for energy management.
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Industrial Automation: This segment encompasses a wide range of automation solutions aimed at improving efficiency and productivity in manufacturing and industrial processes. Schneider Electric provides programmable logic controllers (PLCs), human-machine interfaces (HMIs), industrial software, and services to automate and optimize production processes.
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Smart Buildings: Schneider Electric offers solutions that integrate energy management with building automation, enhancing the efficiency and sustainability of facilities. This includes technologies for lighting control, HVAC systems, security, and building management systems (BMS), enabling organizations to reduce energy consumption and improve occupant comfort.
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Data Centers and Edge Computing: This segment focuses on powering, cooling, and securing data centers and IT infrastructures. Schneider Electric provides solutions like uninterruptible power supplies (UPS), cooling systems, and software for monitoring and managing data center operations efficiently.
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Sustainable Solutions: Schneider Electric emphasizes sustainability, offering products and services that help customers improve their environmental impact. This includes renewable energy integration, smart grid solutions, and energy-efficiency consulting.
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Digital Services: The company has increasingly pivoted toward providing digital transformation services, including software solutions that leverage data analytics and artificial intelligence to optimize operations and enhance decision-making processes in energy and automation.
Through these segments, Schneider Electric aims to create interconnected and sustainable ecosystems that empower organizations to manage energy and automation effectively across various industries, including commercial buildings, industrial sectors, and energy providers.
Schneider Electric SE, a global leader in energy management and automation, holds several unique competitive advantages over its rivals:
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Comprehensive Product Portfolio: Schneider Electric offers a vast array of products and solutions across various sectors, including industrial, commercial, and residential markets. This broad product range enables them to cater to diverse customer needs and creates cross-selling opportunities.
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Strong Focus on Sustainability: With a commitment to sustainability, Schneider Electric leads in energy efficiency and carbon footprint reduction. Their initiatives align with increasing global emphasis on sustainable practices, providing them with a competitive edge, particularly among eco-conscious consumers and organizations.
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Innovation and R&D Investment: Schneider Electric consistently invests in research and development to drive innovation. Their advancements in IoT, AI, and digital transformation enhance their product offerings, creating smarter, integrated solutions that appeal to customers looking for advanced automation and energy management systems.
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Global Presence with Local Expertise: They operate in over 100 countries, establishing a strong global presence while also leveraging local market knowledge. This dual approach allows them to tailor solutions according to regional needs, regulatory requirements, and cultural preferences.
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Strategic Partnerships and Ecosystem: Schneider has built strong partnerships with various technology firms, enhancing their capabilities in automation and energy management. Their extensive ecosystem fosters collaboration and innovation, providing customers with integrated solutions that meet broader operational needs.
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Digital Transformation Leadership: Schneider Electric is at the forefront of digital transformation in their sector. With their EcoStruxure platform, they deliver connected products, edge computing, and analytics, helping businesses optimize operations and drive efficiencies.
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Customer-Centric Approach: By focusing on customer success through tailored solutions and services, Schneider Electric builds long-term relationships and loyalty. Their consultative selling approach ensures that they address specific customer pain points.
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Strong Brand Reputation: As a well-established brand with over 180 years of history, Schneider Electric enjoys significant trust and recognition in the market. Their reputation for quality and reliability makes them a preferred choice among businesses and consumers.
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Adaptability and Resilience: In a rapidly changing technological landscape, Schneider Electric has demonstrated adaptability in its business strategies, allowing it to pivot in response to market demands and disruptions, such as the shift towards renewable energy sources.
By leveraging these competitive advantages, Schneider Electric is well-positioned to maintain its leadership in energy management and automation while effectively competing against rivals in the industry.
As of my last data update, Schneider Electric SE, a global leader in energy management and automation, faces several risks and challenges in the near future:
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Supply Chain Disruptions: The ongoing effects of the COVID-19 pandemic, geopolitical tensions, and natural disasters can lead to material and component shortages, impacting production and delivery timelines.
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Economic Uncertainty: Inflationary pressures and potential recessions in key markets may affect demand for Schneider’s products and services. Economic slowdowns can lead to reduced capital expenditures in sectors like construction and industrial automation.
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Regulatory Changes: Schneider operates in a heavily regulated environment, especially with respect to environmental regulations. Changes in regulations could require significant adjustments to operations or product lines.
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Technological Evolution: Rapid technological advancements in areas like IoT, AI, and renewable energy require continuous innovation and investment. Schneider must stay ahead of competitors and ensure products evolve in line with new technologies.
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Cybersecurity Threats: As the company increasingly relies on digital solutions and IoT tools, there's a growing risk of cyberattacks, which can compromise customer data and disrupt operations.
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Competition: The markets Schneider operates in are competitive, with numerous players from large multinational corporations to agile startups. Maintaining market share while differentiating products is a constant challenge.
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Talent Acquisition and Retention: The need for skilled professionals in engineering and technology is rising. Attracting and retaining top talent in a competitive labor market is critical for sustaining innovation and growth.
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Sustainability Pressure: While Schneider is committed to sustainability, increasing pressure from stakeholders for aggressive climate action requires ongoing investment in sustainable practices, which can strain resources.
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Market Volatility: Fluctuations in energy prices and the demand for renewable energy solutions can affect Schneider's profitability and project viability.
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Global Expansion Risks: As the company looks to expand into emerging markets, it faces risks related to political instability, currency fluctuations, and different regulatory environments.
Navigating these challenges will require strategic planning, investment in technology, a focus on sustainability, and maintaining strong relationships with stakeholders.
Revenue & Expenses Breakdown
Schneider Electric SE
Balance Sheet Decomposition
Schneider Electric SE
Current Assets | 20.9B |
Cash & Short-Term Investments | 4.4B |
Receivables | 11.3B |
Other Current Assets | 5.2B |
Non-Current Assets | 40B |
Long-Term Investments | 2.8B |
PP&E | 4.4B |
Intangibles | 31.1B |
Other Non-Current Assets | 1.8B |
Current Liabilities | 17.2B |
Accounts Payable | 7.8B |
Accrued Liabilities | 3.6B |
Short-Term Debt | 362m |
Other Current Liabilities | 5.4B |
Non-Current Liabilities | 16.1B |
Long-Term Debt | 11.4B |
Other Non-Current Liabilities | 4.7B |
Earnings Waterfall
Schneider Electric SE
Revenue
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36.4B
EUR
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Cost of Revenue
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-21B
EUR
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Gross Profit
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15.4B
EUR
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Operating Expenses
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-9.3B
EUR
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Operating Income
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6.1B
EUR
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Other Expenses
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-2.3B
EUR
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Net Income
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3.9B
EUR
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Free Cash Flow Analysis
Schneider Electric SE
EUR | |
Free Cash Flow | EUR |
The company achieved a 15% increase in organic revenue, hitting €17.6 billion, with strong contributions from its Energy Management and Digital Services sectors. Gross margin improved by 220 basis points, reflecting price carryover and productivity. Free cash flow rose significantly by 86% to €820 million for the half, and cash conversion ratio reached 41%, with expectations to be near 100% by year-end. For 2023, the company projects organic adjusted EBITA growth of 18%-23%, combining organic revenue growth of 11%-13% and adjusted EBITA margin improvements of 120-150 basis points.
What is Earnings Call?
SU Profitability Score
Profitability Due Diligence
Schneider Electric SE's profitability score is 57/100. The higher the profitability score, the more profitable the company is.
Score
Schneider Electric SE's profitability score is 57/100. The higher the profitability score, the more profitable the company is.
SU Solvency Score
Solvency Due Diligence
Schneider Electric SE's solvency score is 59/100. The higher the solvency score, the more solvent the company is.
Score
Schneider Electric SE's solvency score is 59/100. The higher the solvency score, the more solvent the company is.
Wall St
Price Targets
SU Price Targets Summary
Schneider Electric SE
According to Wall Street analysts, the average 1-year price target for SU is 252.61 EUR with a low forecast of 176.75 EUR and a high forecast of 308.7 EUR.
Dividends
Current shareholder yield for SU is .
Shareholder yield represents the total return a company provides to its shareholders, calculated as the sum of dividend yield, buyback yield, and debt paydown yield. What is shareholder yield?
Ownership
SU Insider Trading
Buy and sell transactions by insiders
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Profile
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Description
Schneider Electric SE engages in the digital transformation of energy management and automation. The company is headquartered in Rueil-Malmaison, Ile-De-France and currently employs 166,025 full-time employees. The company operates through two segments: Energy Management and Industrial Automation. Energy Management includes the subsegments Low Voltage, Medium Voltage and Secure Power. Low Voltage targets residential and commercial buildings, spanning across industries, infrastructures and data centers offering protection functions, power monitoring and control, power meters and electrical enclosures, among others. Medium Voltage provides products and software for the integrated management of mission-critical infrastructure, advanced grid solutions and asset performance management, among others. Secure Power specializes in critical power products and solutions for data centers and networks where power continuity and quality are essential. Industrial Automation provides comprehensive solutions for the automation and control of machines, manufacturing plants and industrial sites.
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The intrinsic value of one SU stock under the Base Case scenario is 197.53 EUR.
Compared to the current market price of 240.1 EUR, Schneider Electric SE is Overvalued by 18%.