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On Friday, HSBC analysts downgraded Siemens (ETR:SIEGn) Healthineers stock from Buy to Hold, setting a price target of EUR61.00. The downgrade was based on the assessment that the current share price already reflects a significant premium compared to its peers, acknowledging the company’s stronger execution and solid product momentum.
Siemens Healthineers, a prominent player in the medical technology sector, now trades at a forward EV/EBITDA (enterprise value/earnings before interest, taxes, depreciation, and amortization) premium of 23% relative to its peers. This is notably higher than its 5-year average premium of 16%, according to Bloomberg consensus.
HSBC’s analysis suggests that while Siemens Healthineers’ comprehensive offerings and robust growth outlook justify a premium over competitors, the stock’s current valuation is seen as fair. The analysts believe that the company’s stock price incorporates the advantages it holds over its peer group.
The firm’s analysts further commented on the situation, stating, "Our target price implies c7% upside and we downgrade SHL to Hold as we think the current share price already captures a premium vs peers, fairly reflecting stronger execution and solid product momentum vs the peer group."
Investors are advised to seek clarity on the parent company’s positioning before deciding to increase their stakes in Siemens Healthineers. This cautious stance comes despite the positive attributes of the company, as the market has already adjusted prices to account for its comparative strengths within the industry.
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