Company Reports

We view Hubbell as an intelligent play on industrial infrastructure spending, particularly from improvements made to the US power grid. The company has one of the most comprehensive offerings across the entire electrical supply chain, from power generation to the end user. In our view, it has wisely chosen to position itself competitively in the highly differentiated electrical components market, avoiding global players that focus on large electrical equipment as well as commoditized portions of the market that sell replicable products like wires and cables.

Hubbell reported second-quarter sales growth of 15% year over year, but 50 basis points of operating margin compression amounted to 12% adjusted earnings per share growth.

Hubbell reported first-quarter organic sales growth of 8.2% year over year, driven by double-digit growth in both of its segments. Management raised its full-year guidance, but the shares fell in April 30 trading.

Hubbell reported fourth-quarter organic sales growth of around 9% year over year. The firm grew organic sales nearly 7% over the full year, driven by strength in Hubbell's electrical solutions segment.

We view Hubbell as an intelligent play on industrial infrastructure spending, particularly from improvements made to the US power grid. The company has one of the most comprehensive offerings across the entire electrical supply chain, from power generation to the end user. In our view, it has wisely chosen to position itself competitively in the highly differentiated electrical components market, avoiding global players that focus on large electrical equipment as well as commoditized portions of the market that sell replicable products like wires and cables.

In the third quarter, Hubbell increased organic sales 3%, and with 30 basis points of operating margin expansion, earnings per share compounded more than 14% year over year. Results were driven by strength in the electrical solutions segment.

We view Hubbell as an intelligent play on industrial infrastructure spending, particularly from improvements made to the US power grid. The company has one of the most comprehensive offerings across the entire electrical supply chain, from power generation to the end user. In our view, it has wisely chosen to position itself competitively in the highly differentiated electrical components market, avoiding global players that focus on large electrical equipment as well as commoditized portions of the market that sell replicable products like wires and cables.

Hubbell reported flat sales year over year, but 160 basis points of EBIT margin expansion led to nearly 14% earnings per share growth. Management raised its EPS outlook, and shares were down over 2% the morning of July 29.

We view Hubbell as an intelligent play on industrial infrastructure spending, particularly from improvements made to the US power grid. Hubbell has one of the most comprehensive offerings across the entire electrical supply chain, from power generation to the end user. In our view, it has wisely chosen to position itself competitively in the highly differentiated electrical components market, avoiding global players that focus on large electrical equipment as well as commoditized portions of the market that sell replicable products like wires and cables.

Hubbell reported a 2% decline in sales year over year, but EPS grew over 15% on 120 basis points of EBIT margin expansion. Management kept full-year guidance with the threat of lowering it in the coming months, sending shares down over 5% on May 1.

Hubbell reported fourth-quarter results the morning of Feb. 4, with quarterly organic sales declining around 3% year over year and full-year organic sales flat. Its utility solutions segment had the greatest impact on consolidated results, growing revenue over 10% from the $1.1 billion acquisition of Systems Control. Excluding discontinued operations, earnings per share grew just above 2%. We’ve increased our fair value estimate to $383 per share from $365 as a result of the time value of money.

We view Hubbell as an intelligent play on industrial infrastructure spending, particularly from improvements made to the US power grid. Hubbell has one of the most comprehensive offerings across the entire electrical supply chain, from power generation to the end user. In our view, it has wisely chosen to position itself competitively in the highly differentiated electrical components market, avoiding global players that focus on large electrical equipment as well as commoditized portions of the market that sell replicable products like wires and cables.

We have consolidated our recent DeepSeek-related coverage in this note. Artificial intelligence affects companies across much of our coverage, including semiconductors, cloud infrastructure, software, utilities, and energy.

On Jan. 27, shares of industrial firms with data center exposure materially underperformed, with some falling by as much as 20%. This followed news that China's DeepSeek developed an AI model with comparable capabilities to US-developed models, but at a fraction of the cost.

We assign Hubbell a fair value estimate of $365 per share after reinitiating coverage. Hubbell's value is underpinned by a wide economic moat, through which we believe it can produce returns above its cost of capital over the next two decades. We also assign Hubbell a Standard capital allocation rating, reflecting its durable balance sheet, sound investment decisions, and reasonable shareholder distributions.

We view Hubbell as an intelligent play on industrial infrastructure spending, particularly from improvements made to the US power grid. Hubbell has one of the most comprehensive offerings across the entire electrical supply chain, from power generation to the end user. In our view, it has wisely chosen to position itself competitively in the highly differentiated electrical components market, avoiding global players that focus on large electrical equipment as well as commoditized portions of the market that sell replicable products like wires and cables.

We will discontinue analyst coverage of Hubbell on or about Dec. 21. We provide analyst research and ratings on over 1,500 companies globally and periodically adjust our coverage according to investor interest and staffing.

Following narrow-moat Hubbell’s third-quarter earnings, we maintain our $322 fair value estimate. Revenue and adjusted operating income fell below our expectations during the quarter, though Hubbell fared worse at the operating income level. However, our expected value accretion from Hubbell’s Systems Control deal completely offsets the negative fair value impact from the weak quarter. Management also tightened its guide by lowering the midpoint of revenue, but raised the midpoint of earnings. That said, it had previously left itself plenty of cushion previously. Nonetheless, both the revised ranges look reasonable to us.

We view Hubbell as an intelligent play on industrial infrastructure spending, particularly from improvements made to the U.S. power grid. Over 90% of Hubbell’s consolidated sales are made in the United States. Hubbell has one of the most complete offerings across the entire electrical supply chain, from power generation to the end user. In our view, it has wisely chosen to competitively position itself in the highly differentiated approximately $58 billion electrical components market, avoiding larger-scale global players that focus on the apparatus markets as well as highly fragmented, commoditized portions of the market that sell easily replicable products, such as wires and cables.

Narrow-moat-rated Hubbell reported supreme second-quarter results, although the market was apparently disappointed. Investment dollars from legislation and grid modernization efforts are key to our long-term thesis, and strong price realization and supply chain recovery remain tailwinds to Hubbell's story. Given these strong trends, we've increased our fair value estimate by 12.5% to $322 per share. Management raised its guidance, but we think it's still conservative. We have lifted our long-term expectation for transmission and distribution to high-single-digit sales growth. While we think the stock remains fairly valued, there could be continued upside risks to our valuation.