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On Tuesday, Morgan Stanley (NYSE:MS) updated its outlook on Siemens Energy AG (ETR:ENR1n) (ENR:GR) (OTC:SMEGF), increasing the price target from EUR80.00 to EUR90.00. The firm maintained its Overweight rating on the stock, signaling confidence in the company’s future financial performance.
Morgan Stanley analysts highlighted Siemens (ETR:SIEGn) Energy as a top pick, citing expectations for significant earnings upgrades that could propel the stock price upward. The firm’s forecast for Siemens Energy’s 2028 EBITA (earnings before interest, taxes, and amortization) is 20% higher than the current market consensus. This optimistic stance is based on a pattern observed after the release of Siemens Energy’s past quarterly results, which have repeatedly led to upward movements in the company’s share price.
The analysts anticipate that the upcoming third-quarter results, expected on August 6, 2025, might prompt an upgrade in EBITA margin guidance for Siemens Energy’s Grid division. Further into the future, Morgan Stanley expects that on November 14, 2025, Siemens Energy will issue new group EBITA margin guidance for 2028. The firm’s base case suggests that the guidance will aim for 12-14% EBITA margins in 2028, compared to the current consensus of 12.2% and Morgan Stanley’s own estimate of 13.8%.
The report also suggests that consensus estimates may be underestimating not only EBITA margins but also revenue growth. Morgan Stanley forecasts a 12% revenue compound annual growth rate (CAGR) for Siemens Energy from 2024 to 2028, which is more optimistic than the consensus estimate of 10%. The analysts believe that the company is in a "backlog margin discovery phase," implying that the most profitable margins from the backlog have yet to be realized.
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