“`html

Evercore ISI on December 24, 2025, spotlighted seven leading stocks within the power and automation sector that stand to benefit from ongoing industry changes. The firm’s insights emphasize strong organic growth trajectories, expanding profit margins, and recent favorable credit rating developments. This focus underscores investment opportunities as the sector adapts to energy transition and technological innovation.

Evercore ISI’s Top Power and Automation Equity Picks for 2026

Topping the list is GE Vernova Inc. (GEV), which, despite a premium valuation, presents significant upside. Evercore projects organic revenue growth exceeding 10% between 2025 and 2028, coupled with an anticipated margin expansion of 1,000 basis points. The target price is $860. Notably, Fitch upgraded GE Vernova’s credit rating to BBB+ and S&P followed with a BBB rating, reflecting enhanced profitability. Market responses are mixed: Wells Fargo lifted its price target, whereas Seaport Global Securities downgraded to Neutral.

Next, Schneider Electric SE (SU FR) achieves an Outperform rating with a €295 price target. While year-to-date results were tempered by concerns over AI and data center demand, Schneider maintains solid fundamentals. The company reaffirmed commitment to shareholder value by announcing a €3.5 billion share buyback program through 2030.

Germany’s Siemens AG (SIE DE) also earned an Outperform rating, with Evercore setting a €295 target. The firm points to Siemens’ undervalued industrial software division and a recovering automation segment. Portfolio simplification is underway, highlighted by plans to spin off a significant stake in Siemens Healthineers. Analyst views diverge: Morgan Stanley downgraded Siemens to Equal-weight citing growth risks, while Nomura upgraded it to Neutral following strong revenue figures.

Growth Outlook in Electrical and Automation Giants

In the U.S., Hubbell Inc. (HUBB) is notable for its attractive valuation and efficiency metrics, with a $575 target price. It is delivering approximately 7% organic growth, boasts EBITA margins at 24% versus 19% for peers, and maintains a 16% free cash flow margin. Earnings per share grew by 12%, supported by valuation multiples near 14.5x EV/EBITA and 19x P/E for 2027. Despite a slight revenue shortfall, its third-quarter 2025 earnings beat estimates. Hubbell also priced $400 million in senior notes for refinancing.

European peer Siemens Energy AG (ENR DE) stands out as the sector’s most undervalued growth stock under Evercore coverage, with a €200 target price. Trading around 14x estimated 2027 EV/EBITA versus 19x for electrical peers, Siemens Energy forecasts organic growth outpacing peers by more than 200 basis points from 2026 to 2028. Its margin expansion is projected to exceed 800 basis points across three years. Moody’s recently upgraded the company’s credit rating to Baa1, while activist investor Ananym Capital is advocating for a strategic review of its wind division, reflecting dynamic market pressures.

Meanwhile, Honeywell International, Inc. (HON) holds a $255 price target and is recognized for having the richest catalyst pipeline among the picks. Although trading near ex-COVID low multiples for EV/EBITA among automation peers, Honeywell aims for a turnaround following its Advanced Materials spin-off. The company revised its 2025 adjusted sales and EPS guidance downward but strengthened governance with the addition of former PepsiCo CEO Indra Nooyi to its board.

Finally, Emerson Electric Co. (EMR) also received an Outperform rating with a $170 price target. Emerson’s superior portfolio quality and innovation pipeline support confidence in organic growth and strong EBITA and free cash flow margins. New 2028 financial targets were unveiled at the recent Investor Day. However, Jefferies downgraded the stock to Hold, emphasizing caution after the completion of its portfolio overhaul.

Power and Automation Sector Trends and Outlook

Evercore ISI’s analysis highlights strong organic revenue growth potential and margin expansion near 1,000 basis points for several companies. The sector benefits from recent credit rating upgrades and proactive corporate strategies, including share buybacks, spin-offs, and shareholder activism. As the power and automation industry undergoes transformation driven by industrial innovation and energy transition, Evercore’s chosen stocks—GE Vernova, Schneider Electric, Siemens AG, Hubbell, Siemens Energy, Honeywell, and Emerson Electric—are well positioned for sustained outperformance. Investors focusing on these sectors should monitor these companies closely through 2028 and beyond.
“`