Barclays upgrades Vertiv, sees $200 price target after stock pullback

Investing.com -- Barclays upgraded Vertiv Holdings Co. to “overweight” from “equal weight” on Friday, citing higher earnings estimates and a revised valuation following recent share price volatility.

Shares of the Ohio-headquartered company were up 4.8% in pre-open trade.

The brokerage raised its price target to $200 from $181. Vertiv shares closed at $164.34 on Dec. 30, 2025, implying potential upside of +21.7% based on the new target.

Barclays said the rating change reflects revised earnings expectations for 2026 and 2027. The analysts said its earnings per share estimates are 8% above consensus for 2026 and 12% above consensus for 2027, driven largely by revenue assumptions.

Barclays now estimates adjusted EPS of $5.68 for 2026, compared with a Bloomberg consensus estimate of $5.24. For 2025, Barclays estimates adjusted EPS of $4.16, compared with a consensus of $4.08.

The price target increase reflects higher valuation multiples applied by Barclays. The brokerage said the $200 target is based on a combination of valuation methods, including a discounted cash flow model, a 22x EV/EBITDA multiple on 2026 estimates, a 29x price-to-earnings multiple on 2026 EPS, and a free cash flow yield of 2.9%.

The prior target of $181 was based on lower EV/EBITDA and P/E multiples. Barclays said its discounted cash flow assumptions, including a 4% growth rate, a 21% margin and an 8% weighted average cost of capital, remain unchanged.

Barclays highlighted Vertiv’s revenue exposure to data centers, stating that about 80% of the company’s sales are derived from that end market, the highest level among U.S. multi-industry companies in its coverage.

Barclays said Vertiv’s organic sales growth has tracked closely with U.S. data center physical infrastructure trends and has exceeded the multi-industry average in recent years. Based on Barclays estimates, organic sales growth is expected to remain elevated through 2026 and 2027.

The brokerage also noted Vertiv’s business mix. Barclays said thermal management accounts for about 31% of Vertiv’s sales, while liquid cooling represents about 4% of sales.

Barclays cited third-party data showing that the liquid cooling market recorded over 110% year-over-year trailing 12-month growth in the third quarter of 2025, with growth expected to continue into 2026, according to estimates from Dell’Oro Group.

Barclays said Vertiv’s operating performance has improved alongside revenue growth. The brokerage estimates an adjusted EBITDA margin of 21.2% for 2025 and 23.1% for 2026, with adjusted EBIT margin rising to 20.7% in 2026 from 18.3% in 2025.

Barclays estimates revenue of $13.23 billion for 2026, up from $10.26 billion in 2025, and adjusted net income of $2.22 billion for 2026, compared with $1.62 billion in 2025.

The brokerage also referenced recent share price performance. Vertiv shares traded within a 52-week range of $53.60 to $202.45 and were below their recent peak near $200 at the time of the brokerage.

Barclays said the stock has underperformed some other overweight-rated names year to date while earnings estimates have continued to rise.

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