Bernstein Initiates Forgent Power With $48 Price Target

Bernstein SocGen Group initiated coverage on Forgent Power Solutions (NYSE:FPS) with an outperform rating and a $48.00 price target, pointing to structural earnings drivers tied to modular data centers and surging electrical grid demand.

The investment firm holds a bullish stance, projecting that the electrical infrastructure provider will capture upside as power consumption patterns shift across industrial and technology sectors.

"The market has yet to fully price in three structural earnings-growth drivers: higher content per megawatt as modular adoption rises, share gains with new and existing customers, and margin expansion as utilization scales," said Chad Dillard, analyst at Bernstein, in a research note.

Earnings Growth Projections Through 2030

Bernstein projects that Forgent Power Solutions will generate an earnings per share compound annual growth rate of 70% through 2030, outpacing Wall Street consensus estimates of approximately 60% over the same period, according to an Investing.com report.

This projected expansion relies on structural shifts in how data centers are constructed and powered. As electricity demands from artificial intelligence and cloud computing infrastructure strain traditional grid capacities, operators are turning to modular alternatives.

Modular Data Center Adoption and Content Expansion

Industry projections indicate that modular data center construction will rise from 40% today to 60% by 2030. This transition directly benefits equipment suppliers capable of delivering integrated power management systems rather than standalone components.

As Forgent Power Solutions shifts its product mix from discrete products to comprehensive integrated systems, the company's content opportunity increases by 55% to $2.8 million per megawatt. This higher-value sales mix is expected to drive top-line revenue growth and operating margin expansion as manufacturing facilities scale to meet demand.

What Is at Stake for Infrastructure Investors

The initiation highlights the growing intersection between industrial power equipment manufacturers and the digital infrastructure buildout. With institutional analysts forecasting growth rates well above broader market averages, suppliers positioned at the center of the modular data center transition are attracting increased scrutiny from major financial institutions assessing grid constraints and power availability.