Siemens: UBS still a buyer

(CercleFinance.com) - This morning UBS confirmed its buy rating on the share of he German conglomerate Siemens, also sticking to its 12-month target price of 138 euros, suggesting upside potential of around 30%.


Indeed, UBS recognises that the consensus around Siemens has become "extremely pessimistic" as from June 2017, primarily due to fears in the gas turbine market, which have been illustrated by woes at GE Power's GE Power business. Another negative point is that subsidiary Siemens Gamesa, which is specialised in wind turbines, has been hit by difficulties in defending its prices, along with a complicated Indian market.

However, UBS believes that the consensus for Siemens' 2018/2019 earnings has almost bottomed out, and that the market is too negative regarding its Power & Gas business, which leaves hope of a revaluation. This is particularly so as the oxidation problems met by GE's turbines do not seem to be able to be extrapolated to Siemens. According to UBS, after 6.2 euros per share in 2017/2018, Siemens' recurrent EPS could rise to 8.1 euros in 2018/2019.



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