Siemens Energy stock: The right direction

Last Updated: 7. Februar 2024By

Siemens Energy shares have slightly increased after the confirmation of the preliminary numbers for the first quarter of 2023/2024 and the positive trend has continued. Through the partial sale of the India business to the former Siemens parent company, Siemens Energy has even moved significantly into profitability.

As of this morning’s trading, the stock of the DAX company is trading at just over 14 euros (as of February 7th, 2024, around 11:30 am). Since the beginning of the year, Siemens Energy has already gained over 20 percent and has clearly overcome the low point from the end of October. Compared to the all-time low, the Siemens Energy share has more than doubled. For investors, the stock still offers opportunities – with not to be underestimated risks.

Siemens Energy in the black – at least after special effects At first glance, the headline is impressive: Siemens Energy is back in the black and has achieved a profit after taxes of almost 1.6 billion euros in the 1st quarter of 2023/2024. However, the reason for the strong result (after a loss of 598 million euros in the previous year’s quarter) is the sale of parts of the India business (18 percent) to the former parent company Siemens. The sale of the shares brought in approximately 1.73 billion euros before taxes.

But even apart from the sale, the first quarter was solid for Siemens Energy: The company was able to significantly increase its earnings before special effects and now record a (plus) 208 million euros instead of a loss of 282 million euros in the previous year. The order intake increased by around 24 percent to 15.4 billion euros and the order backlog is at a record level of 118 billion euros. For the troubled subsidiary, Gamesa, the loss from the previous year has at least been halved.

Siemens Energy shares: Is this the new beginning? As one of the biggest losers on the DAX last year, Siemens Energy had a catastrophic year on the stock market in 2023, including state guarantees. But since the end of October, the stock has risen significantly again, more than doubling since then. And the latest Q1 results offer hope – the DAX company still expects a profit after taxes of up to 1 billion euros for the current fiscal year.

This offers opportunities for investors for the Siemens Energy share to recover even more strongly. This is particularly conceivable in the medium term, as the order backlog is gigantic and the business with energy transmission is booming. However, two aspects should not be underestimated: The problems with Gamesa have not yet been solved – despite decreasing losses. And after the rally of the past 3 months with almost 110 percent increase in share price, setbacks are possible at any time.

Siemens Energy share, 3 years – Source: