Vertiv Holdings Co. (VRT) has been downgraded to Peerperform from Outperform by Wolfe Research, citing a more balanced risk-reward outlook following recent stock performance. The firm maintains its price target at $115, implying modest upside potential.
- Vertiv (VRT) downgraded to Peerperform from Outperform by Wolfe Research
- Price target maintained at $115, implying 3% to 5% upside from current levels
- Forward P/E ratio of 19.2x matches sector median, reducing valuation discount
- 2026 revenue growth forecast: 3% to 5%, with stable operating margins near 16.5%
- Recent 18% stock gain over six months narrows potential upside
- Sector-wide valuation concerns affecting data center infrastructure providers
Vertiv Holdings Co. (VRT) has been downgraded to Peerperform from Outperform by Wolfe Research, reflecting a shift in the firm’s assessment of the data center infrastructure provider’s near-term trajectory. The change comes after the stock rose approximately 18% over the past six months, narrowing the gap between its current valuation and estimated fair value. Wolfe now views the company’s growth prospects as fairly priced, with limited near-term catalysts to drive significant outperformance. The firm’s updated analysis points to a modest 3% to 5% annual revenue growth forecast for Vertiv through 2026, driven by steady demand in colocation facilities and digital infrastructure upgrades. Operating margins are expected to remain stable around 16.5%, supported by cost discipline and ongoing efficiency initiatives. Despite this, Wolfe notes that the company’s forward price-to-earnings ratio of 19.2x aligns closely with the sector median, reducing the margin of safety for investors. Market impact is limited to a minor repositioning within institutional portfolios, with no immediate changes to earnings expectations. The downgrade affects the broader infrastructure and data center equipment sector, where similar firms such as Emerson Electric (EMR) and Schneider Electric (SE) are under similar scrutiny for valuation relative to growth. Analysts caution that elevated interest rates and extended CapEx cycles may constrain near-term capital allocation in the sector. The outlook for Vertiv remains constructive over the long term, particularly as AI-driven data center expansion continues, but the current valuation suggests limited upside over the next 12 months. Investors are advised to monitor quarterly backlog trends and customer diversification metrics for signs of renewed momentum.