Siemens Energy share price has had a remarkable turnaround in the past two years. ENR jumped to a high of €92.12 on Wednesday, up by over 1,350% from its lowest point in 2024, giving it a market capitalization of over €73 billion, making it the 6th biggest German company after SAP, Siemens, Deutsche Telekom, Allianz, and Rheinmetall.
From near-death experience to a turnaround
Siemens Energy has had a strong turnaround, two years after its challenges led to many analysts to predict an eventual turnaround. The crisis stemmed from problems in its wind turbine business, known as Siemens Gamesa.
It then escalated after S&P Global slashed its credit rating to BBB-, just a notch above junk status. S&P cited its challenges at Gamesa, which went through soft demand amid high interest rates and quality issues. It also cited its high debt load.
Siemens Energy share price has jumped after the government intervened and gave it a backstop with guarantees worth about €7.5 billion or $8.1 billion. The guarantee helped the company access capital from other lenders, while Siemens AG also intervened.
Siemens Energy share price has also done well as the management made actions to boost efficiency. For example, it recently launched an initial public offering of its business in India.
The company also recently replaced the €11 billion guarantee backed by the German government with a new €9 billion facility. This new facility will last for five years and is from a consortium of 23 banks.
Siemens Energy share price has also jumped after the company achieved an investment-grade rating from Moody’s, one of the biggest credit rating companies globally. Moody’s cited its improving balance sheet and growing backlog. An investment-grade rating helps it to lower capital costs.
Strong financials and backlog
Siemens Energy stock price has jumped as the company’s financials showed that its business was doing well. Results revealed that its orderbook increased by 52% during the quarter to €14.43 billion. This growth was mostly because of its gas services and grid technologies business.
Siemens Energy’s revenue rose by 20% in the second quarter to €9.96 billion, while its profit soared by 22.7% to €615 million. Most notably, the company’s backlog surged to over €133 billion.
Most of Siemens Energy’s backlog is in its gas services business, which had over €52 billion. Its grid technologies has a backlog of over €38 billion, while the transformation segment had over €8 billion.
Siemens Gamesa remains under pressure as its losses remain and its demand in the offshore and onshore business has slowed. Its orders dropped by 1%, while its loss jumped by 41% to over €510 million.
Siemens Energy share price analysis
The daily chart shows that the Siemens Energy stock price has been in a strong rally this year, moving to a record high of nearly €92 from the 2023 low of €6.55.
It has moved above the bullish pennant pattern. A bullish pennant is comprised of a vertical line and a symmetrical triangle pattern. It often leads to more gains over time.
Siemens Energy stock price has remained above the 50-day and 100-day Exponential Moving Averages. Therefore, the most likely scenario is where it rises to the psychological point at €100. It will then pull back as investors book profits.
Read more: Siemens Energy stock move from worst to best in Germany
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