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Investing.com -- Bernstein downgraded Siemens AG (ETR:SIEGn) to “market perform” from “outperform” and set a price target of €230, in a note dated Tuesday.
Shares of the German tech company were down 3.1% at 06:51 ET (10:51 GMT).
The move came as analysts said the company’s valuation has swung from a historical discount to a record premium, leaving little upside for investors.
Siemens reported earnings per share of €10.51 in fiscal 2024. Bernstein projects EPS to rise to €12.99 in 2025 before slipping to €10.82 in 2026.
The brokerage’s estimates compare with prior forecasts of €12.75 and €10.88 for 2025 and 2026.
Revenue is expected to grow from €75.93 billion in 2024 to €79.24 billion in 2025 and €83.02 billion in 2026, while EBITDA margins are forecast to remain broadly stable, edging from 17.4% to 17.8% over the same period.
The analysts said earnings expectations for fiscal 2026 are already full, with consensus assuming nearly 6% organic growth, including a 7.7% gain in Digital Industries. Bernstein’s 2026 EPS estimate of €10.82 sits 2% below consensus of €11.02.
On valuation, Siemens trades at 22.6 times 2024 earnings, falling to 18.3 times in 2025 before climbing to 21.9 times in 2026.
The dividend yield is projected at 2.2% in 2024, 2.4% in 2025 and 2.5% in 2026. Siemens’ market capitalization stands at €191.2 billion, with an enterprise value of €229.3 billion.
Bernstein said Siemens’ long-standing conglomerate discount, which reached as much as 40% in 2024 compared with peers Schneider Electric and ABB, has fully reversed.
The company now trades at an 18% conglomerate premium, with its stub business excluding Healthineers valued at 15.1 times EBITDA.
That multiple is higher than Schneider at 13.4 and ABB at 16.1. Analysts concluded that the premium is difficult to justify given the fundamentals.
The downgrade also reflected skepticism over the Dec. 9 capital markets day, where Siemens is expected to outline its next steps regarding its stake in Siemens Healthineers.
Bernstein said a full exit would be most favorable to investors but is unlikely, while partial options may disappoint.
Despite the downgrade, Bernstein said Siemens continues to provide exposure to secular trends in automation, electrification and industrial software, but with its valuation stretched, the stock now offers limited potential for further gains.