Shares of Dax 40-listed Siemens Energy AG (DE:ENR) gained over 8% after it released its market-beating preliminary financial results for Fiscal Q1. The company also confirmed its outlook for Fiscal 2024. The favourable numbers came as a sigh of relief after the company faced a substantial decline in investor confidence in 2023, as it struggled to resolve challenges within its wind business. In the last 12 months, the stock fell by almost 30%.
Siemens Energy is engaged in the design and operation of a range of energy systems, including wind turbines, gas turbines, steam turbines, etc.
A Positive Turnaround
Siemens Energy reported a 12.6% increase on a comparable basis in its revenue of €7.65 billion over the first quarter of FY23. The Q1 FY24 revenue surpassed the consensus estimate of €7.35 billion. The order intake witnessed a solid growth of 23.9% to €15.4 billion. The profit before special items came in at €208 million, with a margin of 2.7%.
Siemens Energy remains optimistic about the overall market environment and has kept its guidance for the current fiscal year unchanged. For Fiscal 2023, ending September 30, 2024, the company expects comparable revenue growth (excluding currency translation and portfolio effects) in the range of 3% to 7%, with a profit margin before special items ranging between minus 2% and plus 1%.
Moreover, during its Capital Markets Day in November, the company revealed its strategy to bring its struggling wind turbine unit to breakeven by FY26. As part of its recovery plan, Siemens Energy aims to achieve €400 million in cost reductions for its challenged wind turbine business by 2026.
The first-quarter results for FY24 are scheduled for February 7, 2024.
Is Siemens Energy Stock a Buy?
Analysts had mixed reactions to Siemens Energy’s Q1 numbers, as reflected in their ratings.
Yesterday, Barclays analyst Vladimir Sergievskiy assigned a Buy rating to the stock, predicting an upside of 10%. On the other hand, analysts at Bernstein and J.P. Morgan confirmed their Sell ratings on the stock. Meanwhile, Jefferies analyst Simon Toennessen maintained his Hold rating, forecasting an upside of 26%.
On TipRanks, ENR stock has a Moderate Buy consensus rating backed by a total of 14 recommendations, of which six are Buy. The Siemens Energy share price forecast is €14.77, which implies a growth of 10.3% from the current trading level.
