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Investing.com -- Siemens Energy shares rose 5.8% on Wednesday after the company said it would return up to €10bn to shareholders by 2028, driven in part by strong demand for gas turbines and improving profitability in its grid business.
The group said up to €6bn of the capital return will come through a share buyback programme, announced alongside its U.S. capital markets day, with the remainder paid as dividends.
Morgan Stanley said the size and timing of the buyback were more positive than expected and signal confidence in the balance sheet.
Analysts said the buyback of €6bln buyback through 2028, part of a €10bln capital return plan exceeded expectations and signals confidence in the balance sheet and in sustained demand.
"We think the backlog margin disclosure today is another data-point that builds confidence in our assumption that the top-end of the 2028 EBITA margin guidance, or above, is achievable,” analysts at Morgan Stanley said.
Siemens Energy said long term gas turbine demand is expected to exceed 100GW a year from 2026 to 2035. It plans to raise its combined cycle turbine capacity to more than 30GW by 2030, reflecting confidence in the power market and in the durability of the current cycle.
Morgan Stanley said this supports the company’s market share but noted that supply additions could pressure new equipment margins later if demand settles closer to 80GW in the 2030s.
Morgan Stanley kept Siemens Energy as its top pick.