Schneider Electric: Very solid operational Q3 coupled with FY growth and margin guidance raise. Buy

Schneider Electric reported Q3 sales 3% ahead of consensus, with organic growth of 16.9% versus 13.8% expected, and raised FY2026 guidance for organic growth to 12-14% from 10-13% and for organic EBITA margin expansion to 100-120bp from 70-100bp, implying a margin of about 19.7-19.8%. We believe the new guidance points to 1-2% consensus upgrades as estimates move toward the upper end of the ranges, while the implied Q4 organic growth of 4-12% and H2 margin of 20.1-20.5% still look somewhat conservative. Data center demand grew triple digits, and China delivered a third consecutive quarter of good growth led by data centers and semiconductors. Although the PTC acquisition and upcoming equity raise remain near-term overhangs, we view the market reaction as overdone and reiterate our Buy rating and €335 price target.