TP ICAP Midcap starts LU-VE at 'buy' on data-centre growth, expansion in US, China

TP ICAP Midcap starts Italian heat-exchanger and cooling-equipment maker LU-VE LUVE.MI at "buy", citing rising demand for data-centre cooling and the group's expanding capacity in China and the U.S., and sees about 27% upside

The broker says LU-VE is well positioned in mission-critical applications such as data centres, nuclear facilities and cold-chain infrastructure

It sets a 50-euro ($58.63) PT and highlights the group's global footprint, including recently doubled capacity in China - supported by government incentives - and an upcoming U.S. manufacturing site as key growth drivers

"We believe LU-VE can continue its growth path by leveraging engineering capabilities and its reliability track record to gain traction in new industrial segments," the broker says

Cooling is one of the last hardware elements in a data centre that software cannot replace, and because it represents only about 1% of total capex, operators will always buy reliable equipment rather than try to innovate around it, TP ICAP Midcap Equity Research analyst Michele Mombelli says

($1 = 0.8528 euros)