On Thursday, Berenberg made an adjustment to the price target on shares of Siemens AG (SIE:GR) (OTC: OTC:SIEGY (BCBA:SIEGYm)), reducing it to €215 from the previous €220. The firm maintained its Buy rating on the stock. This decision follows a recent discussion with Siemens' CFO, Ralf Thomas, at the German Corporate Conference held on September 24, 2024.
The adjustment was made after revising forecasts for the company's fourth quarter and full year 2025. Berenberg trimmed its expectations for Siemens' Digital Industries division but raised forecasts for the Smart Infrastructure segment. The combined effect of these revisions is a modest decrease, approximately 2.5% on average, to the earnings per share (EPS) estimates for fiscal years 2024 to 2027.
Despite the slight downgrade in EPS forecasts, Berenberg's revised price target of €215 still implies a roughly 24% upside from the closing price on the previous day. The firm's valuation is based on a discounted cash flow (DCF) model. Additionally, Berenberg highlighted that their secondary sum-of-the-parts (SOTP) valuation indicates an even higher potential value for Siemens shares, approximately €241.
The analyst's commentary did not specify any changes to the company's operational strategies or market conditions that might have influenced the revised forecasts. Instead, the focus was on the financial adjustments made post the conversation with Siemens' CFO.
Berenberg's analysis suggests confidence in Siemens' growth prospects, despite the minor adjustments to the financial projections. The firm's Buy rating remains unchanged, signaling its positive outlook on the company's performance potential.
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