Trade the Prysmian share!
PRYSMIAN

Analysis before buying or selling Prysmian shares

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Among the European company’s shares which you can find on the online share market , those of Italian companies are particularly popular with investors. We decided to tell you more about the Prysmian share here. You'll discover information about the group and its activities, but also historical data from the technical analysis of its stock price, to help you develop your own strategies.

Elements to consider before selling or buying Prysmian shares

Analysis N°1

First of all, the electricity and the telecommunications market in Italy along with the rest of Europe are to be monitored very closely as Prysmian's activities depend largely on their financial health and demand level.

Analysis N°2

The development of fibre optics is also an interesting element to analyse because it represents an additional profit opportunity for Prysmian.

Analysis N°3

Closely monitoring the group's news on establishing strategic partnerships and alliances allowing it to develop its profitability is also important.

Analysis N°4

Finally, paying attention to the operations carried out by Prysmian aimed at expanding its activities from a geographic point of view, notably by reaching new countries close to Italy or in the rest of Europe.

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General presentation of Prysmian

Having a good knowledge of the company that issues a share on the stock market before buying or trading it is essential for the implementation of the inherent analyses. For this reason, we offer you a complete presentation of Prysmian and its various sources of income:

The Prysmian Group is an Italian company that operates in the cable sector. More specifically, the company specialises in the design, production, sale and installation of cables and cabling systems.

In order to better understand the company's activities, they can be divided into different divisions according to the share of turnover they generate, as follows:

  • Electrical cables and cabling systems account for 86.3% of the group's turnover with low, medium and high voltage distribution cables, special industrial equipment cables, submarine cables, signalling cables and battery cables.
  • The next largest segment is telecom cables and cabling systems, which generate 13.7% of the group's sales, with copper and fibre optic cables, metal conductor communication cables, long distance network cabling components and systems.

Currently, the Prysmian Group has 104 production sites around the world. In 2021, the company employs more than 23,321 people at these various production sites, many of them in Italy.

It is also interesting to know the geographical distribution of the Prysmian group's revenues. Today, only 10.2% of its turnover is generated in Italy. The rest comes from Europe, Middle East and Africa (43.2%), North America (30.8%), Asia Pacific (8.1%) and Latin America (7.7%).

 

Analysis before buying or selling Prysmian shares
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The major competitors of Prysmian

If it is important to know the Prysmian company and its activities well, you must also know its main competitors in this sector in order to analyse its sectoral environment. Here is a presentation of the main opponents that the group is currently facing:

Nexans 

This company specialises in the cable transmission line industry and is based in Paris. It is present in various sectors of activity including building and territories, high voltage, telecommunications and data, industry and solutions.

Sumimoto Electric Industries

This Japanese company specialises in the production of cables, optical fibre, automotive equipment, electronics and electrical appliances. It is listed on the Japanese Topix 100 index and is part of the Sumimoto Group.

General Cable

This US company is based in Kentucky and specialises in the production of wire and cable, including electrical cable, aluminium cable, fibre optic cable and others. The group is also listed on the NYSE.

LS Cable & System

This other company is a South Korean company that specialises in the manufacture of electrical and telecommunications cables as well as systems, integrated modules and other industrial materials. In particular, the group provides engineering, installation and commissioning services for high-voltage and extra-high-voltage lines and turnkey submarine cabling projects. The group is currently the largest cable manufacturer in South Korea and one of the largest in the world.

Leoni

Finally, the Leoni Group is a German company listed on the MDAX index that is the country's leading manufacturer of cables and cable harnesses.The company employs over 49,822 people and is particularly well positioned in Europe.


The major partners of Prysmian

Prysmian also regularly sets up strategic partnerships with other companies, as we suggest you discover with these few examples:

Dassault Systèmes

The group has collaborated with Dassault Systèmes in the implementation of the Fast Track project aimed at creating intelligent factories and which allows it to rely on the applications of this French company in the digital management of production activities.

Soufflet Vigne

In 2021, the group has also set up a partnership with Soufflet Vigne to whom it has entrusted the exclusive distribution of its antifreeze solution for vineyards. This is an innovative process using a heating cable to protect vines from sub-zero temperatures.

Eolien Maritime France

The joint venture between France's EDF and Canada's Enbridge recently signed a strategic partnership with Prysmian for the development and turnkey supply of cable connections for the two offshore wind farms in Fécamp and Courseulles sur Mer owned by EMF and WPD offshore and located off the north coast of France. These contracts are worth over €200 million and will enable the development of these two large-scale wind farms.

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Positive factors for Prysmian shares
The factors in favour of a rise in the Prysmian share price:
  • Firstly it is important to remember that the Prysmian Group benefits from a strong position against the competition as it is one of the leaders in this activity sector worldwide. For this it relies on various factors including its strong position in this market sector with added value. This success is also due to a high quality product portfolio that is particularly well diversified. To conclude, Prysmian has succeeded over time in implementing a successful international expansion strategy as this company is now well represented throughout the world.
  • From an economic and financial point of view, the Prysmian Group also offers an effective cost structure. To achieve this stability and efficacy the group enthusiastically proceeded with a reorganisation in 2007 managed by a team that was both committed and experienced. This continues even now to provide Prysmian with an improved control of its costs and optimal margins.
  • Although the Prysmian Group is clearly not the only company to exercise its activities in this sector, we note that the barriers obstructing entry are quite significant here which dissuade new competitors from trying to force their way into this market. In fact, to enter into this market sector that has strong added value and where Prysmian currently bases its strategy upon, companies need to be quite a significant size and possess a good sized capital with significant operating funds as well as long experience and strong relations particularly with public service companies.
Negative factors for Prysmian shares
The factors in favour of a drop in the Prysmian share price:

Against these numerous arguments in favour of a rise in the Prysmian share price we do of course find a number of negative factors concerning the growth possibilities of this asset that could lead to a reversal in the rising trend.

  • For example, we know that the Prysmian Group and its activities depend greatly on the price of copper. Variations in the price of copper therefore have a high impact on the prices charged by Prysmian to its clients and the desire of the group to retain its margins. On the other hand, the direct competitors to the Prysmian Group would prefer the sale prices to remain stable and reduce their margins. This therefore incurs the risk of a reduction in Prysmian’s market share in the situation whereby the price of copper suddenly rises.
  • These movements, often unfavourable relating to the price of copper, add to the general significant downturn in the price of the cable. In fact, after attaining a peak at its appearance on the markets in the beginning of the 21st century at $55 per kilometre, the cable balloon finally burst and led to a real drop in the cable price to less than $10 per kilometre.  This drop in price was notably due to an extremely high production during this time which was finally balanced by an overall stability in demand from 2010. In any case, if the cable price continues at the current fairly stable rates then the Prysmian Group would be unprotected should a new drop in the market occur.
The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

How was the Prysmian Company created?

It was in 2005 that the Prysmian Company as we know it today was created. It was following the intervention of the Goldman Sachs group which bought the activities of Pirelli Cavi SpA, a subsidiary of the Pirelli group that year that this entity is born. It's important to know that more than 80% of the capital of the Prysmian Company is held by a large international public and that only 20% of this capital belongs to institutional investor shareholders.

Who are the major institutional investors in Prysmian's capital?

Part of the capital of the Prysmian Company belongs to private institutional investors. We know that BlackRock holds 5.725% of the shares, Fil Limited holds 3.323%, UBS 2.467%, Standard Life 2.157%, JP Morgan Chase & Co 2.170%, Jabre Capital Partners 2.097%, Lazard 2.078%, Schroder Investment Management Ltd owns 2.027% and the rest of the capital is distributed to the public.

Is it possible to trade Prysmian shares online?

Yes! It is possible to trade the Prysmian share price online using CFDs, contracts for difference. These contracts allow investors to bet on the rise or drop of the price of the value without having to buy these securities beforehand.

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