Siemens Energy: Shares Rise on Impressive Preliminary Results, Full-Year Guidance Unchanged

Investors in no-moat Siemens Energy received a welcome surprise in the form of strong preliminary first-quarter results, which comfortably exceeded company-compiled consensus. First-quarter orders grew 24% to EUR 15.4 billion, significantly ahead of consensus of EUR 12.8 billion. Declining losses within Siemens Gamesa also helped restore profitability to the group following two consecutive quarters of operating losses. The group wasn’t expected to deliver results until next month, and the impressive results sent shares 8% higher on Jan. 24. We continue to view the shares as marginally undervalued relative to our EUR 14.80 fair value estimate, which is unchanged. Outperformance during the first quarter was attributed to the timing of certain project deliveries; therefore, management maintained its full-year guidance.