Should I buy siemens energy shares


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Siemens Energy AG shares have shown significant recovery and present an interesting investment opportunity, and here's why:
- Strong Financial Performance: Siemens Energy's financials have improved significantly, with a reported net income of €119 million in Q3 FY 2024, a substantial increase from the previous year's net loss of €2,089 million1. This turnaround is a positive indicator of the company's financial health and stability.
- Positive Market Sentiment: The company's shares have been rising, with a significant increase of 3.8% before the weekend, making it one of the best-performing stocks in the German DAX2. This rise in stock price reflects positive investor sentiment and confidence in the company's future prospects.
- Upcoming Targets and Growth Prospects: Analysts expect Siemens Energy to set new targets for 2027 and 2028, which could help close the valuation gap to its competitor GE Vernova3. This suggests a positive outlook for the company's growth and potential for further stock price appreciation.
- Order Intake and Demand: The company has seen strong order intake and robust demand across its segments, particularly in gas turbines and grid technologies45. This demand is expected to continue, which is a positive sign for future revenue growth.
- Valuation Metrics: The company's P/E ratio, P/B ratio, and P/S ratio are not currently available, but the market's positive sentiment and the company's strong financial performance suggest that the stock may be undervalued relative to its earnings and growth prospects.
However, there are some factors to consider before making a decision:
- Wind Turbine Business Challenges: Siemens Energy's wind turbine business, Siemens Gamesa, has been a source of weakness for the company in the past. While the company has made progress in addressing these issues, the wind segment still presents challenges5.
- Debt Levels: The company has a high debt-to-equity ratio of 38.86%, which indicates a reliance on debt financing6. This could be a concern for investors regarding the company's financial leverage and potential risk.
In conclusion, Siemens Energy AG shares show potential for growth, driven by strong financial performance, positive market sentiment, and upcoming targets. However, investors should consider the company's wind turbine business challenges and high debt levels when evaluating the investment opportunity. If you are comfortable with these factors and believe in the company's growth prospects, Siemens Energy shares may be a worthwhile addition to your portfolio.
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