Siemens gets new Buy rating as Citi says AI-led automation will drive next upcycle

Investing.com -- Citi has reinstated coverage on Siemens (ETR:SIEGn) with a Buy rating and a €245 price target, citing the company’s growing leadership in industrial AI and automation. 

The firm believes Siemens’ expanded software portfolio puts it “into a leading position to enable agentic and physical AI in industrial applications.”

While Citi acknowledged that cyclical concerns remain due to tariff-related macro uncertainty, it emphasized the strength of long-term trends. 

“We continue to see strong long-term secular tailwinds in both automation and electrification,” analysts wrote in a note. 

The investment bank highlighted Siemens’ “breadth of offerings across software and automation markets” as a core strength.

Citi views Siemens’ €7 billion Digital Industries software portfolio as a major competitive advantage, following recent acquisitions including Altair and Dotmatics. 

“We see the breadth of the software offering, domain expertise, and installed base of edge devices as consolidating a competitive moat for Siemens,” the firm said. 

The ongoing shift toward software and SaaS models is also expected to support higher mid-term growth and margin targets.

Citi also believes Siemens should fully divest its 73% stake in Healthineers, suggesting a spin-off could be beneficial for both financial and strategic reasons. 

“We think Siemens should fully exit Healthineers,” the firm wrote, noting that deconsolidation could lift return on capital employed (ROCE) from 18–19% to approximately 25% and reduce net debt/EBITDA from 0.9x to 0.2x by fiscal 2026.

Despite trimming its 2026 EPS forecast by about 6% due to softer expectations in short-cycle markets, Citi maintained a constructive view on Siemens’ future. 

“AI-led automation in focus” will remain the key theme, Citi said, with Siemens well-positioned for the next industrial upcycle.