Berenberg is urging investors to be more selective in European cable stocks as valuations diverge and medium-term expectations reset. The brokerage downgraded Prysmian to Hold following recent outperformance while maintaining its Buy rating on Nexans, which it sees as trading at an unjustifiable discount to peers.

European cable makers are benefiting from data center buildouts and structural drivers like electrification and grid investment, but Berenberg believes the risk/reward varies significantly across companies. The firm sees Nexans as its top pick, citing new management, a leaner portfolio, and clarity on the Great Sea Interconnector issue that has weighed on shares since 2024. Analysts expect future price moves to track underlying earnings more closely.

Prysmian faces a tougher outlook as Berenberg argues the company is "passing peak supremacy." The brokerage believes recent share rerating and ambitious consensus expectations leave little room for upside, particularly as Nexans and NKT narrow Prysmian's lead in key financial metrics. The analysts also expect Prysmian's share price to remain more volatile due to greater direct exposure to the U.S. and data centers.