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On Thursday, Deutsche Bank (ETR:DBKGn) analyst Gael de-Bray increased the price target for Siemens Energy AG (ETR:ENR1n) (ENR:GR) (OTC: SMEGF) shares to €68.00, up from the previous target of €65.00, while reiterating a Buy rating on the stock. The upgrade comes ahead of the company’s fiscal second-quarter results, which are scheduled to be announced on May 8.
Siemens (ETR:SIEGn) Energy is expected to demonstrate strong commercial dynamics in the upcoming report, with a book-to-bill ratio of 1.4x. The company’s organic revenue growth is forecasted at 13%, propelled by significant contributions from its Grid Tech and Gas Services sectors, which are anticipated to grow by 29% and 12%, respectively.
The analyst also projects an improvement in the adjusted EBITA margin, estimating it will rise to 6.9%, a substantial increase from the 2.1% margin reported a year ago and the 5.4% margin in the fiscal first quarter. Additionally, it is anticipated that Siemens Energy’s management will revise its free cash flow (FCF) guidance upwards to "at least €2.5 billion," a notable increase from the previous "up to €1 billion."
The heightened demand for electricity and the ongoing energy transition are driving substantial investments in energy infrastructure. This trend is expected to benefit Siemens Energy across all its business segments. Furthermore, the valuation disparity between Siemens Energy and its close peer GE Vernova, which trades at a 2026E EV/EBITDA of 18.3x compared to Siemens Energy’s 11x, is seen as a potential factor that could continue to bolster the company’s stock value.
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