Nexans Shares Drop 4.37% Midday After Delays Announced on Great Sea Interconnector Project
The French cable manufacturer's stock fell by 4.37% to 126.90 euros this Tuesday, January 6th at midday, erasing its weekly gains following the announcement of a rescheduling for the Great Sea Interconnector project. Despite assurances from the company on maintaining its 2028 targets, investors reacted negatively. The stock had already lost nearly 5% at the start of the session before partially recouping its losses.
Project Delays Announced
Nexans announced this Tuesday, January 6th, delays in the completion of the Great Sea Interconnector project, a 1.4 billion euro contract won in 2023 for the supply of submarine cables for an electrical interconnection between Greece and Cyprus. A rescheduling of the activity timeline is currently being studied with the client. The stock recorded a decline of 4.37% to 126.90 euros at midday, after opening with a sharp drop of nearly 5%, thus erasing the 1.12% gain recorded over the last seven days. Trading volumes remain moderate with 0.09% of capital traded. This correction follows a year-on-year increase of 21.9% and a three-month decline of 3.06%, placing the price still well above the 50-day (123.88 euros) and 200-day (115.10 euros) moving averages. Nexans specified in today's communication that it will unveil its 2026 targets during the announcement of its 2025 annual results on February 19, 2026. However, the cable manufacturer reaffirmed that these adjustments will affect the project's delivery date, but will not impact its 2028 targets, thanks to the strength of the group's order book and proactive actions to offset any potential impact from 2026. This statement did not suffice to reassure investors who remember the turbulence from early December, when on December 9th, Nexans had fallen more than 6% on news reports that the French group had canceled tenders for work related to this major contract after a joint decision by Cyprus and Greece to freeze this electrical interconnection project.
Market Analysts' Mixed Reactions
Amidst these uncertainties, American bank JP Morgan raised its price target for the stock from 131 to 145 euros this Tuesday, while maintaining a neutral recommendation. This nearly 11% revaluation occurs paradoxically on the day of the delay announcement on the GSI project, suggesting that the analyst favors a long-term view of the stock. This revision is part of a moderate consensus with an average analyst target of 134 euros according to the latest data available. Jefferies had slightly raised its target from 139 to 140 euros on December 16th, also maintaining a hold recommendation. The RSI at 64 suggests a moderately buying zone without apparent overheating, while the MACD remains positive with a line at 1.03 above its signal at 0.39, confirming an underlying bullish momentum. The Bollinger Bands, ranging from 119.65 to 132.22 euros, place the current price near the lower bound after this decline, indicating a potential for technical rebound. Nexans is also among the thirty European stocks favored by Oddo BHF for 2026. The broker expects the company to continue the strong earnings momentum initiated in 2018 by former CEO, Christopher Guérin, replaced last November by Julien Hueber.
Continued Strategic Transformation Beyond Project Turbulence
Beyond the turbulence related to the Great Sea Interconnector project, Nexans continues its transformation into a pure player in electrification. The group finalized the acquisition of Electro Cables Inc. in Canada on December 17th, a company generating approximately 125 million euros in revenue, thereby strengthening its presence in North America in the low-voltage cables sector. Additionally, the group entered exclusive negotiations on December 22nd with Indian group Motherson for the sale of its subsidiary Autoelectric, specialized in automotive wiring harnesses, for an enterprise value of 207 million euros. This transaction, expected to close by mid-2026, marks the completion of the French group's strategic transformation. Independent of the GSI project, Nexans remains very confident in the long-term growth prospects of its PWR-Transmission business, driven by strong structural trends and a solid and diversified order book. The group has adjusted its 2025 outlook to the new scope, with adjusted EBITDA expected between 710 and 760 million euros, compared to a range of 810 to 860 million announced in July including the divested activities. The free cash flow remains unchanged between 275 and 375 million euros, and the 2028 targets are confirmed. With standard revenue of 7.1 billion euros in 2024 and 28,500 employees across 41 countries, Nexans retains the fundamentals of a major player in the energy transition, despite the scheduling challenges on its major infrastructure projects.
