NVent Electric's (NVT) data center hyper-growth cycle is set to have a runway of multiple years ahead due to strong demand for liquid cooling and its partnerships with key chipmakers and hyperscalers, RBC Capital Markets said in a Wednesday note.
The company's data center business is seeing a strong order pipeline, a record backlog, and revenue momentum, underpinned by growth of 30% to 40% in the liquid cooling vertical, where demand far exceeds supply, RBC analysts said.
The company appears to be on target with its plans to double liquid cooling manufacturing capacity by the end of the year, the analysts said. In recent investor meetings with company executives, another major capacity expansion was hinted at, but no specifics were provided, according to the analysts.
With NVent's net leverage of 1.5x and $1 billion in capacity for acquisitions, the company may look to acquire in the power utilities sector, which would complement their existing business and estimated 20% organic sales growth for 2026, according to the note.
RBC's rating on the company's stock is outperform with a price target of $180.
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