On Friday, JPMorgan made a notable adjustment to its stance on Siemens Energy AG (ENR:GR) (OTC: SMEGF), upgrading the stock from Underweight to Neutral. The firm also substantially increased its price target for the company, setting it at EUR32.80, a significant rise from the previous EUR13.00 target.
This upgrade reflects a positive shift in the firm's perspective on Siemens Energy's performance and prospects. The analyst noted that since the beginning of the year, Siemens Energy has seen an order intake that surpassed both the firm's and the consensus expectations. This performance stands in contrast to previously held concerns about potential market share loss due to what was perceived as a weak balance sheet.
The analyst anticipates that demand will remain robust for Siemens Energy's Gas and Grid services, projecting a continuation of the current level of order intake through fiscal year 2025. This expectation is seen as enhancing the visibility of the company's performance into 2026 and beyond.
JPMorgan's revised outlook is also based on a methodological change. The firm is now applying its target multiple to its calendarized 2026 estimates, shifting from the 2025 estimates used previously. This change, along with updated estimates that now align with the consensus for 2025 and 2026, has contributed to the substantial increase in the price target for Siemens Energy.
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