The numbers were exemplary by any standard. Siemens Energy booked €17.7 billion in new orders during its second quarter, hoisted its full-year profit forecast, and pledged up to €3 billion in share buybacks. Yet the stock closed Friday at €169.18, shedding 4.98% on the day and 5.01% across the week. The message from the market was clear: after a 123.55% run over twelve months, even superb results can be met with a shrug — or worse.
The valuation backdrop explains the dissonance. Siemens Energy now trades at roughly 65.2 times trailing earnings, more than double the sector average of around 28.1. That multiple leaves almost no margin for disappointment. Every piece of news must not only be good, but good enough to justify the premium. The current fair value estimate of €178.68 sits only about 5.6% above Friday’s close, implying that much of the recovery story is already priced in.
Operationally, the evidence of a turnaround is undeniable. In the first half of its fiscal year, Siemens Energy generated €19.969 billion in revenue and reported net income of €1.443 billion. The second quarter alone saw comparable revenue growth of nearly 9% to €10.3 billion and an operating result of €1.16 billion. Order intake jumped almost 30% year-on-year to €17.7 billion, pushing the backlog to a staggering €154 billion. Chief Executive Christian Bruch responded by raising guidance: the group now expects 14% to 16% comparable revenue growth, a net profit of around €4 billion, and free cash flow before tax of approximately €8 billion.
Analysts largely shrugged off the post-results sell-off as profit-taking. Bernstein Research lifted its price target to €210, Goldman Sachs to €212, and both Deutsche Bank and Berenberg to €200. The consensus of 25 analysts stands at roughly €187, still more than 10% above the current price. The market, however, appears to be demanding proof that the strong order flow will translate into sustainable margin expansion — especially at the troubled wind division, Siemens Gamesa.
Should investors sell immediately? Or is it worth buying Siemens Energy?
Gamesa remains the most sensitive point in the investment thesis. While the wider group is generating cash and expanding buybacks (the programme was raised to up to €3 billion for the current year), the wind-turbine subsidiary continues to weigh on sentiment. Complex large-scale projects mean that order intake alone is insufficient; execution margins matter far more. The management has signalled that an update on medium-term targets through 2030 will be released in November, with Gamesa’s restructuring and grid-technology demand expected to feature prominently.
Broader tailwinds offer support. Germany’s Bundestag has passed the revised RED III directive, which will lift the greenhouse-gas reduction quota from 12% to 17.5% by 2027, eventually reaching 65% by 2040. Meanwhile, the global build-out of AI data centers is driving investment in power grids and generation capacity — a trend from which Siemens Energy benefits disproportionately. Every fourth gas turbine sold globally is now linked to data centre demand, according to industry estimates.
For now, the technical picture focuses on the €170 level. If Siemens Energy can stabilise around that mark, the recent retreat will look like a healthy consolidation within a long-term uptrend. A decisive break below, however, would give more weight to valuation concerns and could trigger a deeper correction. With the stock still up 37.77% since the start of the year, the bull case rests on the hope that earnings growth will eventually close the gap with the share price. Until it does, every quarterly report will be scrutinised through the lens of the lofty multiple — and even record orders may not be enough to keep the rally going.
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