Jefferies maintains its 'buy' recommendation on Siemens while raising its price target from €185 to €225, believing in particular that 'the market continues to underestimate Siemens' ability to generate results at a cyclical trough in automation'.
Perhaps Siemens isn't the industry's card to play AI like Schneider, but average annual EPS growth in the mid-10% range to 2026 surely looks very compelling at a 30% valuation discount', he judges.
According to Jefferies, Digital Industry trades at an implied EV/EBITA of 7.4 times, or 46 euros too cheap. In fact, our valuation of DI at 17 times EBITA, and therefore of software at six times revenues, still seems conservative", continues the broker.
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Siemens AG is one of the world's leading manufacturers of electronic and electro-technical equipments. Net sales (including intragroup) break down by family of products as follows:
- digital industrial equipment (28.2%): automated production, assembly, logistics and monitoring systems, etc.;
- medical equipment (27.8%): medical imaging systems, laboratory diagnostics and hearing aid systems, etc.;
- smart building and infrastructure solutions (25.6%): energy transition solutions, HVAC products (heating, ventilation and air conditioning systems), building security systems (fire detection and protection systems, access control, video surveillance and intrusion detection systems, etc.), building management systems, etc.;
- mobility solutions and systems (13.5%): rail vehicles, rail automation systems, rail electrification systems, digital and cloud-based solutions, etc.
The remaining net sales (4.9%) are primarily from financial activities (leasing, equipment and project financing, financial consulting services, etc.).
Net sales are distributed geographically as follows: Germany (16.3%), Europe/CIS/Africa/Middle East (30.8%), the United States (23.9%), America (5.2%), Asia and Australia (23.8%).