Bernstein: nVent’s third-quarter orders and results beat expectations; new capacity will determine the pace of growth

Where did third-quarter results beat expectations?

Revenue in the third quarter of 2026 was 1.515 billion dollars, up 43.7% year over year and 5.9% above the Visible Alpha consensus estimate; adjusted earnings per share were 1.52 dollars, above the consensus estimate of 1.40 dollars.
Enclosures revenue rose 53.4% year over year to 1.098 billion dollars; operating margin increased from 20.4% a year earlier to 23.1%, benefiting from higher volumes, pricing and productivity.
Electrical & Fastening Solutions revenue rose 23.2% year over year, but operating margin fell from 30.0% to 28.2%; inflation and growth investments weighed on margin, although it had improved sequentially.

Organic orders grew at a low double-digit rate in the third quarter despite a high comparison base of 65% growth a year earlier, exceeding the buy side’s expectation threshold of approximately 10%; backlog increased sequentially to 2.6 billion dollars, and management said orders in October were also very strong.
Current orders and backlog are driving the company to expand its Arizona plant and Blaine 2. Bernstein expects the two facilities to contribute almost no revenue in the first half of 2027, with contributions increasing gradually in the second half and approaching revenue levels corresponding to capacity as the company enters 2028.
The company expects capital expenditure of approximately 140 million dollars in 2026, up 50% year over year, with the increase mainly allocated to capacity expansion projects supporting data centers, utilities and supply chain resilience.

Management expects Maverick Power to contribute approximately 10 percentage points to nVent’s full-year 2026 revenue growth and bring power infrastructure capabilities and backlog. Bernstein believes nVent’s existing sales channels could drive sales of Maverick products.
Following the acquisition, Bernstein estimates that nVent’s product value per megawatt of data center capacity exceeds 2 million dollars. Management expects Maverick’s fourth-quarter operating margin to be in a range around 15%, with integration and investment weighing on initial margins; Bernstein expects margins to improve in 2027 as investments are completed and synergies emerge.

The company raised its full-year 2026 revenue growth guidance to 48%–49%, organic revenue growth guidance to 38%–39%, and adjusted earnings per share guidance to 5.36–5.39 dollars. Overall operating margin is expected to increase by approximately 60 basis points year over year in the fourth quarter, while Maverick integration investments will constrain incremental margins.
Pricing and productivity offset nearly 60 million dollars in inflation costs in the third quarter, of which approximately 20 million dollars was related to tariffs. The company expects full-year tariff costs of approximately 105 million dollars.
Bernstein raised its adjusted earnings per share forecasts for 2026 and 2027 from 5.15 dollars and 6.55 dollars to 5.39 dollars and 6.98 dollars, respectively; it maintained its outperform rating and raised its target price from 229 dollars to 233 dollars. The target price increase reflects rolling the valuation model forward by one quarter, while the firm reduced its target EV/EBITDA multiple for the Enclosures business from 26 times to 24 times.