UBS has selected five capital goods companies expected to deliver strong results ahead of the new European industrial earnings season, including Prysmian, Schneider Electric, Siemens Energy, Weir Group, and Andritz, all rated "Buy."

UBS believes that AI data center construction, power grid infrastructure investment, and demand for industrial equipment and mining technology will serve as the main growth drivers.

Among them, Prysmian is expected to raise its full-year earnings guidance, Schneider Electric may lift its revenue growth outlook, and Siemens Energy is anticipated to benefit from grid equipment orders and the ramp-up of new U.S. production capacity.

Prysmian: Fiber Optic Prices Up 135% Year-on-Year, Full-Year Earnings Guidance Poised for Upgrade

UBS has assigned a "Buy" rating to Italian cable manufacturer Prysmian with a target price of 175 euros, and believes its upcoming quarterly report could be one of the most important guidance updates of the year.

UBS expects Prysmian's quarterly EBITDA to come in about 3% above consensus. Its digital solutions business is projected to achieve 25% organic growth, primarily driven by rising fiber optic prices.

In August of this year, fiber optic prices rose 135% year-on-year, providing support for revenue growth in the related business.

UBS estimates that Prysmian may raise its full-year 2026 EBITDA guidance range to 2.9 billion to 3.0 billion euros, representing an increase of approximately 3.5% over the midpoint of the existing guidance range.

Key future growth drivers include continued expansion of the fiber optic business, the release of new transmission equipment capacity, and potential opportunities to sign long-term supply agreements with major cloud computing service providers.

Schneider Electric: Data Center Demand Remains Strong, Orders Extend to 2028

UBS maintains its "Buy" rating on Schneider Electric with a target price of 335 euros, and expects the company to slightly raise its full-year 2026 organic growth guidance.

UBS noted that the strong growth trend in Schneider Electric's energy management business during the first half continued into the third quarter, prompting the bank to raise its third-quarter organic growth forecast for the segment to 15.9%.

The bank expects Schneider Electric may raise its full-year organic growth guidance from the current 10% to 13% range to 11% to 14%.

Data centers remain the primary source of demand. UBS stated that some of the new data center project orders added in the third quarter are already scheduled for execution in 2027 and 2028, reflecting that customers are planning their power and energy management infrastructure investments years in advance.

As AI data centers continue to scale up, demand for power distribution, energy management, and related electrical equipment continues to grow, and Schneider Electric is well-positioned to benefit from this investment cycle.

Siemens Energy: Grid Business Margin Expected to Exceed 20.5%, New U.S. Capacity Begins Contributing Revenue

UBS has assigned a "Buy" rating to Siemens Energy with a target price of 210 euros, and expects the company's fourth-quarter orders and earnings to outperform market expectations.

Specifically, UBS's forecast for fourth-quarter new orders is 2.5% above consensus, and its adjusted EBITA forecast is 1.5% higher.

The bank estimates that Siemens Energy's equipment capacity reservation agreements will increase from 26 gigawatts in the third quarter to approximately 34 gigawatts, reflecting sustained growth in customer demand for future equipment delivery capacity.

The grid technology business is expected to stand out. With new U.S. production capacity coming online, UBS projects the segment's fourth-quarter margin will rise from 19.9% in the third quarter to above 20.5%.

During the same period, Siemens Energy's overall organic revenue growth rate is expected to reach 19%.

UBS believes that grid construction demand and new manufacturing capacity will together support the company's order and earnings growth.

Weir Group: Mining Equipment Orders Grow, Third-Quarter Organic Growth Could Reach Double Digits

UBS maintains its "Buy" rating on U.K.-based mining equipment manufacturer Weir Group with a target price of 3,250 pence.

UBS expects Weir Group to achieve approximately 8% organic growth in the third quarter and sees the possibility of actual growth reaching double digits.

Among segments, the mining equipment division is expected to drive overall order growth, benefiting from a lower comparative base in the same period last year.

Two high-pressure grinding roll orders announced in the third quarter are also expected to support original equipment business growth.

Additionally, the mining software business Micromine has now begun contributing to organic growth performance, further expanding the company's business coverage in mining equipment and digital solutions.

Andritz: Hydropower Projects Drive Order Growth, UBS Sees Valuation Still Attractive

UBS has assigned a "Buy" rating to Austrian industrial equipment manufacturer Andritz with a target price of 100 euros.

The bank expects the company's third-quarter order performance to remain solid, with new order intake potentially exceeding 2 billion euros once again.

The hydropower business is expected to be the main highlight. Andritz recently secured a contract worth several hundred million euros from Slovakia, which will support order growth in the related business.

UBS also noted that Andritz currently trades at an EV/EBIT ratio of approximately 9.6 times.

The bank believes the company's valuation is low, institutional investor ownership is insufficient, and sell-side research coverage is relatively limited, giving it potential for further market attention.

Overview of Ratings and Target Prices for the Five Companies

Company / UBS Rating / Target Price / Key Focus: Prysmian / Buy / 175 euros / Fiber optic price increases, full-year earnings guidance upgrade; Schneider Electric / Buy / 335 euros / AI data centers, power management equipment demand; Siemens Energy / Buy / 210 euros / Grid order growth, new U.S. production capacity; Weir Group / Buy / 3,250 pence / Mining equipment orders, software business growth; Andritz / Buy / 100 euros / Hydropower equipment orders, relatively low valuation.

The five companies selected by UBS cover different areas of industrial investment.

Among them, Prysmian, Schneider Electric, and Siemens Energy primarily benefit from data center, power transmission, and energy infrastructure investment, while Weir Group and Andritz are more driven by mining equipment, hydropower projects, and industrial capital expenditure demand.

Looking ahead to the upcoming earnings reports, UBS is focused on whether Prysmian and Schneider Electric will raise their full-year guidance, whether Siemens Energy can further expand orders and margins, and whether Weir Group and Andritz can deliver on new order growth.