Deutsche Bank raises Siemens Energy target to €12, maintains hold rating

Deutsche Bank has increased its price target for Siemens Energy to €12 from €10, maintaining a “hold” stance on the stock. The adjustment follows a review of insights from an investor meeting, which highlighted the company’s progress toward its mid-term goals in gas and grid operations. The bank also emphasized the importance of a divestiture plan valued between €2.5 to €3 billion, aimed at ensuring financial stability and offsetting any potential need for capital increases.

Siemens Energy’s efforts to streamline its processes appear to be on track, but challenges remain, particularly with its subsidiary Siemens Gamesa. The bank noted that Siemens Gamesa’s extensive restructuring efforts are expected to continue affecting Siemens Energy’s cash flow negatively until at least 2026. This projection suggests that while there are positive movements within the company’s core areas, investors may need to brace for a longer period of recovery for its wind power division.

The focus on divestitures is seen as a strategic move to bolster Siemens Energy’s balance sheet and mitigate concerns over additional capital-raising initiatives. This approach is intended to provide the company with greater fiscal security as it navigates through the complexities of restructuring and market demands.

The revised price target reflects a cautious optimism about Siemens Energy’s direction, acknowledging both the strides made in certain segments and the ongoing headwinds faced by Siemens Gamesa. Investors are thus provided with a balanced view of the company’s financial health and prospects, recognizing the steps taken toward stability while remaining aware of the challenges that lie ahead.

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