ROK - Schneider Electric Leveraged To Multiple Secular Growth Drivers

• Schneider posted an impressive beat relative to expectations for Q3, and the company easily outperformed its main peers in electrical and automation.
• Electrical (EM) growth is tied to ongoing investments in data centers (including 5G/edge computing investments to come), green retrofits, and further automation/digitalization of industries.
• Automation demand looks secure with or without reshoring as companies look to substitute capital for labor, but don't overlook opportunities in construction and oil/gas even with a challenging macro environment.
• Schneider isn't cheap on its own merits, but relative to the premiums investors are wiling to give other secular multi-industrial growth stories, it's tempting to ignore the valuation and invest in the story.

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