WESCO International (WCC) PT Raised at KeyBanc as 'Data Center Momentum Vector Continues'

KeyBanc analyst Ken Newman raised the price target on WESCO International (NYSE: WCC) to $240.00 (from $210.00) while maintaining an Overweight rating.

The analyst commented: "Data Center Momentum Vector Continues; WCC reported 2Q results that beat on revenue, but slightly missed margin expectations, mainly driven by unfavorable mix from larger projects, including hyperscale data centers. WCC continues to drive solid momentum within its data center business, with sales up ~65% y/y. We are particularly encouraged by stronger growth from the gray space portion of projects, with sales up over 90% y/y. We think this should support LT opportunities within WCC's higher-margin white space applications as we estimate gray space construction typically leads by ~4-6 quarters. While the updated margin outlook is modestly disappointing, we think improving sales momentum should be supportive of stronger mix and EPS growth into FY26. Specifically, we think UBS demand inflection will likely be the strongest driver of mix improvement, and we are encouraged by mgmt's expectations for a return to growth in 2H. Additionally, we see potential upside from tariff-related price increases (which are not included in WCC's updated guidance), and expect the majority of benefits to flow-through in FY26. As such, we continue to view risk/reward as attractive and reiterate our OW rating, while raising our price target to $240."

You May Also Be Interested In

• Fiserv (FISV) PT Lowered to $60 at Freedom Broker
• Phillips 66, Marathon Merger Talks Collapsed - Semafor
• Critical One Energy closes second tranche of flow-through placement