Schneider Electric (SU) AI Stock Analysis

• Market Cap: €139.68B
• Dividend Yield: 1.65%
• Average Volume (3M): 914.69K
• Price to Earnings (P/E): 31.7
• Beta (1Y): 1.28
• Revenue Growth: 7.89%
• EPS Growth: 11.06%
• Country: FR
• Employees: 155,822
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 4.63
• Shares Outstanding: 577,122,500
• 10 Day Avg. Volume: 710,297
• 30 Day Avg. Volume: 914,686
• PEG Ratio: -12.07
• Price to Book (P/B): 5.46
• Price to Sales (P/S): 3.29
• P/FCF Ratio: 26.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €296.60
• Price Target Upside: 19.60% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): 9.83
• Revenue Forecast (FY): €43.07B

• Rating: 71 Outperform
• Price Target: €274.00 ▲(10.48% Upside)
• Action: Upgraded Date: 03/01/26
• Date: Action: Upgraded 03/01/26

The score is driven mainly by solid fundamentals (steady growth, healthy profitability, and strong free cash flow), supported by a strong technical uptrend. These positives are tempered by elevated valuation and increased leverage in 2025, with overbought technical signals adding near-term risk.

Positive Factors

Strong cash generation

High and improving free cash flow, with FCF roughly 82.5% of net income and a strong year-over-year FCF increase, provides durable internal funding for capex, R&D, dividends, and debt reduction. Reliable cash conversion supports strategic investments and resilience through cycles.

Stable, improving profitability

Sustained gross margins and rising EBIT margin reflect pricing power, operational efficiency, and scale benefits across equipment and services. Improved operating profitability creates margin buffer to absorb cost shocks and underpins long-term return on invested capital.

Diversified model and structural tailwinds

Broad exposure across buildings, industrial, utilities and data centers plus software, services and channel partners reduces reliance on any single market. Structural drivers — electrification, energy efficiency and automation — sustain multi-year demand for hardware, software and lifecycle services.

Negative Factors

Rising leverage

Higher debt-to-equity reduces financial flexibility and raises interest-rate sensitivity. Increased leverage narrows room for strategic investments or opportunistic M&A without further borrowing or equity issuance, elevating solvency risk if cash flow growth slows.

Net margin compression

A decline in net margin while revenue rose signals rising costs, higher financing/tax pressure, or mix shifts. Persistent margin compression would erode profitability and free cash flow over time, limiting reinvestment capacity and reducing cushion against cyclical downturns.

Limited cash cover for debt

Operating cash flow covering roughly one-third of debt implies modest debt service headroom. With elevated leverage, this limited coverage reduces ability to rapidly deleverage and could constrain capital allocation or necessitate refinancing under less favorable terms if market conditions tighten.

Schneider Electric Business Overview & Revenue Model

Company Description

Schneider Electric S.E. provides energy and automation digital solutions worldwide. It operates through two segments, Energy Management and Industrial Automation. The company offers busway and cable support products, circuit breakers and switches, contactors and protection relays, electrical protection and control products, energy management software solutions, transfer switches, surge protection and power conditioning products, power monitoring and control products, power quality and power factor correction products, pushbuttons, switches, pilot lights and joysticks, software products, and switchboards and enclosures. It also provides access control, building management, fire detection, sensors and room units, valve and valve actuator, and variable and frequency speed drive. In addition, the company offers feeder automation, grid automation and SCADA software products, medium voltage switchgears and transformers, outdoor equipment, substation automation products, and switchgear components. Further, it provides critical power and cooling services, data center software, IT power distribution products, prefabricated data center modules, racks and accessories, and security and environmental monitoring products; home automation and security, installation materials and systems, light switches and electrical sockets, and uninterruptible power supply products; and human machine interface, industrial automation software, industrial communication, measurement and instrumentation, motion control and robotics, signaling units, programmable logic and automation controllers, power supply and protection, process control and safety, RFID systems, signaling devices, and other industrial automation and control products, as well as solar and energy storage. The company was founded in 1836 and is headquartered in Rueil-Malmaison, France.

How the Company Makes Money

Schneider Electric makes money primarily by selling electrical distribution, power management, and industrial automation products, as well as related software and services, to commercial, industrial, utility, and infrastructure customers. 1) Product and systems sales (hardware-led revenue) - Electrical distribution and power management equipment: Revenue is generated from the sale of medium- and low-voltage electrical distribution products and systems used to safely distribute and protect power in facilities and grids. This includes switchgear, circuit breakers, protection devices, motor control, UPS/power-quality equipment (where applicable), metering, and power monitoring components. These are typically sold through a mix of direct sales to large projects/customers and indirect channels such as distributors, panel builders, contractors, and integrators. - Industrial automation products: Schneider Electric earns revenue from automation and control offerings such as PLC/PAC controllers, drives, motion control, industrial control components, and related automation architectures used in manufacturing and process industries. Sales occur via direct engagement with industrial accounts and through automation partners, system integrators, and distributors. - Project/solution revenue: For larger customer deployments (e.g., data centers, critical facilities, industrial plants, and infrastructure), Schneider Electric can bundle equipment with engineering, integration, commissioning, and lifecycle support into broader solutions. This increases deal size and often ties hardware sales to follow-on services. 2) Software and digital revenue (licenses and subscriptions) - Schneider Electric generates revenue from software used to monitor, manage, and optimize energy usage, electrical assets, building operations, and industrial processes. Monetization can include perpetual licenses, subscriptions (SaaS), and maintenance/support contracts depending on the product and customer deployment model. Software is commonly attached to hardware installations and enterprise modernization programs, helping create recurring revenue and deeper customer retention. 3) Services revenue (recurring and lifecycle) - Services include consulting, audits, design/engineering support, installation and commissioning support, maintenance contracts, field services, modernization/retrofit services, training, and digital/remote monitoring services. These services produce revenue through time-and-material engagements and multi-year service agreements, often linked to the installed base of Schneider Electric equipment and software. 4) Channel ecosystem and partner-led growth - A significant portion of revenue is supported by Schneider Electric’s partner ecosystem—distributors, electrical contractors, panel builders, OEMs, and system integrators—who specify, resell, and integrate Schneider products into end-customer projects. This ecosystem helps scale sales across geographies and verticals and drives repeat demand tied to new construction, capacity expansions, and retrofit cycles. 5) Key factors that support earnings - Installed base and replacement/upgrade cycles: Electrical distribution and automation equipment often has long lifecycles, creating ongoing demand for spares, upgrades, and modernization services. - Electrification, energy efficiency, and automation trends: Demand is driven by customers investing in grid modernization, data centers, building efficiency, industrial productivity, and decarbonization initiatives. null

Schneider Electric Financial Statement Overview

Summary

Solid multi-year revenue expansion with durable profitability and strong free cash flow growth. Offsetting factors are higher 2025 leverage (debt-to-equity up to ~0.73 from ~0.54) and a modest net margin dip versus 2023–2024, which increases risk and suggests higher cost/financing pressure.

Income Statement

Revenue has expanded steadily from 2021–2025 (2025 revenue growth ~2.1% off a higher base after strong post-2020 recovery). Profitability is consistently solid for the industry: gross margin is broadly stable around ~39–43% and 2025 operating profitability improved versus earlier years (EBIT margin ~17.5% vs ~12.0% in 2020). A key watch-out is that 2025 net margin (~10.4%) dipped versus 2023–2024 (~11.1%), and net income was slightly lower than 2024 despite higher revenue—suggesting incremental cost/finance/tax pressure.

Balance Sheet

The balance sheet is generally healthy with meaningful equity and good returns (2025 return on equity ~17.2%, up from ~14.0% in 2024). However, leverage has moved higher: debt-to-equity rose to ~0.73 in 2025 from ~0.54 in 2024, driven by higher debt and lower equity year-over-year. This increases financial risk and reduces flexibility versus the prior year, even though profitability remains supportive.

Cash Flow

Cash generation is strong and improving: 2025 operating cash flow increased to ~6.1B and free cash flow to ~5.1B, with a sharp free-cash-flow growth rate (~20.4%). Free cash flow conversion remains solid (free cash flow is ~82.5% of net income in 2025, consistent with prior years). The main weakness is that operating cash flow covers only about a third of total debt (~0.33 in 2025), which is reasonable but not especially conservative given the step-up in leverage.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	40.15B	38.15B	35.90B	34.18B	28.91B
Gross Profit	16.49B	15.91B	14.62B	13.40B	11.35B
EBITDA	8.68B	8.09B	7.38B	6.40B	5.75B
Net Income	4.16B	4.27B	4.00B	3.48B	3.20B
Balance Sheet
Total Assets	62.50B	65.94B	58.90B	58.37B	54.55B
Cash, Cash Equivalents and Short-Term Investments	4.63B	6.89B	4.70B	3.99B	2.63B
Total Debt	17.74B	16.31B	13.93B	11.73B	10.84B
Total Liabilities	38.05B	34.66B	31.73B	32.27B	26.44B
Stockholders Equity	24.20B	30.49B	26.46B	25.44B	24.44B
Cash Flow
Free Cash Flow	5.06B	4.63B	4.54B	3.26B	2.74B
Operating Cash Flow	6.13B	5.58B	5.91B	4.35B	3.62B
Investing Cash Flow	-8.25B	-1.99B	-5.75B	-1.48B	-5.59B
Financing Cash Flow	306.00M	-1.62B	879.00M	-1.38B	-2.67B

Schneider Electric Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 248.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:SU, the sentiment is Negative. The current price of 248 is below the 20-day moving average (MA) of 258.56, below the 50-day MA of 248.64, and above the 200-day MA of 235.16, indicating a neutral trend. The MACD of 0.17 indicates Positive momentum. The RSI at 44.42 is Neutral, neither overbought nor oversold. The STOCH value of 48.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:SU.

Schneider Electric Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ALPM	73 Outperform	€131.92M	8.23	11.66%	2.03%	3.35%	242.49%
SU	71 Outperform	€139.68B	31.72	15.76%	1.65%	7.89%	11.06%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
MTU	63 Neutral	€727.11M	10.78	7.79%	6.54%	-12.27%	-55.24%