Citi analyst Martin Wilkie has resumed coverage of Siemens (SIEGY, Financial), issuing a 'Buy' rating and setting a price target of EUR 245. This endorsement reflects Siemens' strengthened position resulting from its expanded software offerings. According to Wilkie, the company's comprehensive suite of solutions positions it as a leader in integrating both artificial and physical intelligence into industrial applications. This strategic enhancement is expected to drive significant value as industries increasingly adopt AI technologies.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 2 analysts, the average target price for Siemens AG (SIEGY, Financial) is $133.91 with a high estimate of $142.68 and a low estimate of $125.14. The average target implies an upside of 16.85% from the current price of $114.60. More detailed estimate data can be found on the Siemens AG (SIEGY) Forecast page.
Based on the consensus recommendation from 3 brokerage firms, Siemens AG's (SIEGY, Financial) average brokerage recommendation is currently 1.7, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Siemens AG (SIEGY, Financial) in one year is $90.32, suggesting a downside of 21.19% from the current price of $114.6. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Siemens AG (SIEGY) Summary page.
SIEGY Key Business Developments
Release Date: February 13, 2025
- Book-to-Bill Ratio: 1.09, with orders backlog at a record high of EUR118 billion.
- Group Orders: EUR20.1 billion, 8% below prior year.
- Revenue Growth: 3% overall, with strong contributions from Mobility and Smart Infrastructure.
- Industrial Business Profit: EUR2.5 billion, exceeding market expectations.
- Earnings Per Share (pre-PPA): EUR2.22, excluding divestment gain for Innomotics.
- Free Cash Flow: EUR1.6 billion, seasonally strong.
- Digital Industries Orders: EUR4.2 billion, 6% above prior year with a book-to-bill of 1.04.
- Digital Industries Revenue: 11% lower, with software business up 15% and automation revenue down 19%.
- Smart Infrastructure Orders: EUR6.2 billion, up 5% with a book-to-bill of 1.17.
- Smart Infrastructure Revenue Growth: 8%, driven by Electrification business up 12%.
- Mobility Orders: EUR2.7 billion, lower due to less volume from large orders.
- Mobility Revenue Growth: 10%, with strong contributions from customer services and rolling stock.
- ARR Growth: 14% over prior year, with cloud portion at EUR1.9 billion (42% of ARR).
- Net Income Gain: EUR2.1 billion from divesting Innomotics.
- Liquidity Strengthening: EUR3.1 billion proceeds from divesting Innomotics and sell-down of Siemens Energy stake.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Siemens AG (SIEGY, Financial) reported a solid start to fiscal year 2025 with a book-to-bill ratio of 1.09, indicating strong demand and a record-high order backlog of EUR118 billion.
- The company achieved a solid profit of EUR2.5 billion in its Industrial business, surpassing market expectations.
- Siemens AG (SIEGY) is making significant progress in sustainability, with offerings sold in fiscal 2024 expected to avoid around 144 million tons of greenhouse gas emissions.
- The company is successfully transitioning its DI software business towards Software-as-a-Service, with ARR growth reaching 14% over the prior year.
- Siemens AG (SIEGY) continues to strengthen its leadership in industrial AI, with strong traction in bringing real-world impact for customers and launching new AI products at CES.
Negative Points
- Group orders were 8% below the prior year, with a notable decline in Mobility orders due to less volume from large contracts.
- The Automation business faced challenges with revenue substantially lower due to continued destocking, particularly in China.
- Economic activity remains sluggish in key regions, with Europe lacking momentum and Germany still in crisis mode.
- The company faces macroeconomic uncertainties, including high volatility from political decisions around tariff regimes.
- Siemens AG (SIEGY) anticipates a challenging first half of fiscal 2025 for Digital Industries, with revenue expected to be down high single digits in the second quarter.
