Investing.com -- Prysmian shares received a higher valuation from Jefferies, which raised its price target to €176 from €117 and maintained its “buy” rating, citing growth prospects in the company’s Digital Solutions business and stronger earnings expectations through the end of the decade.

Shares of the Milan-based company were up 2.1% at 04:43 ET (08:43 GMT).

Jefferies said the new target implies 19% upside from Prysmian’s previous closing price of €148 and reflects a higher sum-of-the-parts valuation, with the group’s implied 2027 EV/EBITDA multiple rising to 16x from 11x previously.

The brokerage increased its 2026, 2027 and 2028 EBITDA estimates by 1%, 7% and 13%, respectively, and said adjusted earnings per share forecasts rose 4%, 14% and 29%.

It also introduced forecasts through 2030, projecting group EBITDA of €4.77 billion by 2030 from €2.81 billion in 2026 and adjusted EPS of €12.45 from €4.89.

Jefferies said Digital Solutions is becoming Prysmian’s main growth driver as demand for optical fibre infrastructure rises alongside AI-related data centre expansion.

The brokerage noted Prysmian plans to add more than 50% new fibre capacity over the medium term through €1.20 billion of investment and has visibility on more than €5.00 billion of revenue through a hyperscaler frame agreement.

The note highlighted a sharp increase in fibre pricing, stating that global average bare fibre prices have risen threefold year-on-year in 2026, while fibre spot prices were up threefold in the first quarter.

Jefferies said supply constraints and rising demand from data centres and defence applications have pushed lead times from weeks to more than a year for some products.

Jefferies forecasts Digital Solutions revenue to grow at an annual rate of about 20% between 2026 and 2030, doubling over the period, while EBITDA is expected to expand at about 30% annually, tripling to €1.12 billion by 2030. The division’s EBITDA margin is projected to increase to 27.0% in 2030 from 20.5% in 2026.

The brokerage also cited operational trends following first-quarter results, saying management reported a stronger-than-expected start to the year and is targeting the upper end of its full-year guidance range.

Jefferies expects EBITDA growth in the Transmission business to accelerate in coming quarters and sees additional margin improvement in both Transmission and Power Grid operations.

For 2026, Jefferies forecasts revenue of €21.50 billion, adjusted EBITDA of €2.81 billion and adjusted EPS of €4.89. By 2027, those figures are expected to reach €23.29 billion, €3.39 billion and €6.55, respectively. “Digital Solutions becomes the engine of growth,” Jefferies said.