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J.P. Morgan has placed Italian cable manufacturer Prysmian (BIT: PRY) on its Positive Catalyst Watch list while maintaining an “Overweight” rating and a €172 price target. The investment bank believes rapidly rising optical fiber prices could significantly boost the company’s earnings in the second half of 2026 and throughout 2027, creating upside that is not yet reflected in market expectations.
Despite positive developments in the optical fiber industry, Prysmian shares were trading at €145.35 on June 5, down approximately 5% since J.P. Morgan released its Digital Solutions sector analysis last month. According to the broker, the recent decline does not fully capture the improving outlook for the company’s high-growth digital infrastructure business.
Prysmian’s valuation remains elevated, with the stock trading at 29.1 times forward earnings. This represents a substantial premium compared to its historical averages, reflecting investor confidence in the company’s long-term growth prospects.
A key driver of the bullish outlook is the sharp increase in optical fiber prices. Prysmian management previously stated that fiber prices had more than doubled over the last six months, and J.P. Morgan’s industry checks suggest pricing has continued to climb, particularly for premium-grade fibers used in data center applications. The bank estimates that every 10% increase in optical fiber cable pricing could lift Digital Solutions organic growth by roughly 6%, while also expanding margins due to Prysmian’s vertically integrated business model.
J.P. Morgan currently forecasts group adjusted EBITDA of €2.8 billion for 2026, excluding any meaningful contribution from exceptional fiber pricing trends. Analysts believe consensus estimates still underestimate the earnings potential for 2027 and 2028.
The firm also highlighted strong industry fundamentals. Limited production capacity and long lead times of 18 to 24 months for new preform facilities are expected to keep supply tight through 2027. Meanwhile, demand continues to rise, fueled by data center expansion, artificial intelligence infrastructure, and broadband network investments.
CRU forecasts optical fiber volumes in Europe and North America will grow at an 11% compound annual rate through 2030. To capitalize on this demand, Prysmian plans to expand optical fiber cable production capacity by 40% to 50%, with most new capacity targeted at the North American market.
Looking ahead, J.P. Morgan identified two important catalysts for the stock: a formal announcement regarding U.S. capacity expansion and the potential for upgraded guidance when Prysmian reports first-half results on July 30. These developments could further strengthen investor confidence and support additional share price gains in 2026 and beyond.
