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On Wednesday, BofA Securities analyst Alexander Virgo upgraded Siemens AG (SIE:GR) (OTC: OTC:SIEGY (BCBA:SIEGYm)) stock from Neutral to Buy, increasing the price target to EUR265.00 from the previous EUR245.00. The upgrade reflects a positive outlook on the company’s organic growth and profit margins. InvestingPro data shows Siemens (ETR:SIEGn) as a prominent player in the Industrial Conglomerates industry, with a robust market capitalization of $182 billion and impressive year-to-date returns of 20.7%. Virgo highlighted that Siemens is showing signs of improvement in its Digital Industries (DI) segment, with organic growth and margins beginning to inflect favorably.
The analyst also pointed out that Siemens shareholders could anticipate further portfolio evolution, especially with potential sell-downs of its stakes in Siemens Healthineers (SHL) and Siemens Energy (ENR). According to Virgo, Siemens is currently trading in line with the Capital Goods sector based on 2026 estimated EV/EBITA multiples, despite Siemens demonstrating approximately 100-200 basis points better growth and margins. The company’s financial strength is evident in its 34-year streak of consistent dividend payments and impressive gross profit margin of 39%. Want deeper insights? InvestingPro offers comprehensive analysis with 10+ additional ProTips and detailed financial metrics.
Virgo’s commentary underscored the resolution of uncertainty surrounding German elections and the growing debate on valuations within the electrical sector. Siemens has outperformed Schneider Electric (EPA:SCHN) (SU), with Siemens shares increasing by 2% relative to a 15% decline in Schneider Electric compared to the SXNP Level 1 Market over the last month.
In light of these developments, BofA Securities has raised its EBITA estimates for Siemens by 1-2%, which now sit approximately 1% above the consensus EBITA for the fiscal years 2026-2027. Additionally, the conglomerate discount in BofA’s Sum of the Parts (SotP) valuation model for Siemens has been reduced to 5% from the previous 10%, due to the anticipated stake sell-downs.
This revised valuation model and the upgraded growth and margin expectations have led to the new price objective of EUR265.00, which corresponds to an ADR price of $138.71, up from the prior ADR price of $127.08. Siemens AG’s stock upgrade and new price target reflect a more optimistic view of the company’s future financial performance and strategic initiatives. According to InvestingPro, the company maintains a "GOOD" overall financial health score and operates with a moderate debt level, though current trading levels suggest the stock may be overvalued relative to its Fair Value. For detailed valuation analysis and more insights, explore the comprehensive Pro Research Report available for Siemens AG, one of 1,400+ companies covered in-depth on InvestingPro.
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