After 167% Surge, Prysmian Shares Cool Off as Profit-Taking Kicks In

Prysmian falls 3.4% on Milan bourse as overbought RSI triggers profit-taking; long-term demand from AI, data centers, and grid upgrades remains intact.

The session was a tale of two sectors on the Milan bourse Monday. While energy heavyweights like Eni surged 3.2% on a jump in Brent crude to $110.57 a barrel, industrial stocks took a beating. At the bottom of the FTSE MIB sat Prysmian, the cable giant that has been on an almost non-stop rally for a year. Its shares dropped 3.4% to €147.95, far outpacing the index's 0.9% decline to 48,669 points.

The pullback was hardly a surprise to technical analysts. The relative strength index had climbed to 76.6 — deep into overbought territory for weeks. The stock now trades more than 55% above its 200-day moving average of €95, and the recent 52-week high of €155.85 — set just a week ago on May 11 — left little room for anything but profit-taking. The first support level at €148.80 has already been breached, putting the €145–149 zone in focus.

Yet the long-term story remains as powerful as ever. Over the past twelve months, Prysmian has delivered a staggering 167% gain, and year-to-date the advance stands at roughly 65%. The market capitalisation hovers around €44 billion, cementing the company's status as a European infrastructure heavyweight. The structural demand for high-performance cables — driven by data centres, AI buildouts, and grid modernisation — shows no sign of slowing. On the US front, the Pennsylvania Digital I project alone targets a 1.35-gigawatt capacity, requiring cable volumes at an industrial scale.

Competitive pressures are also intensifying. Nexans, a key rival in the high-voltage submarine cable market, took delivery of its new cable-laying vessel "CLV Nexans Electra" on Monday. The hybrid ship can carry 13,500 tonnes of cable and lay up to four lines simultaneously — a clear signal that the race for offshore wind and interconnection contracts is heating up. Meanwhile, in the utility sector, NextEra Energy's $67 billion acquisition of Dominion Energy underscores the enormous investment needed in power grids, a core market for Prysmian.

Valuation, however, gives pause. The stock trades at a price-to-earnings ratio of roughly 34, leaving little margin for error. The dividend yield, below 1%, offers no cushion for income-focused investors. Other Italian names fared better on the day: Tamburi Investment Partners reported a net profit of €23.5 million for the first quarter — four times the year-ago figure — and El.En. posted a 3.3% revenue increase to €145.6 million. That divergence suggests Monday's selloff in Prysmian was more about profit-taking than a broader sector rot.

Whether the dip becomes a buying opportunity or the start of a deeper correction will depend on how quickly new large-scale orders are announced. For now, the stock is testing a support corridor that runs from €145 to €149 — a zone that must hold if the recent rally is to resume.