Siemens Energy shares rise as JP Morgan upgrades rating to 'neutral'

Investing.com -- Shares of Siemens Energy (ETR:ENR1n ) have seen an uptick following a rating upgrade by JP Morgan to "neutral" from "underweight.” 

At 4:58 am (0858 GMT), Siemens Energy was trading 3% higher at €35.74.

This change reflects a shift in investor sentiment as concerns about the company's weak balance sheet ease, driven by stronger-than-expected order intake and robust demand in key sectors like gas turbines and grid technologies.

Earlier in the year, JP Morgan had downgraded Siemens Energy due to worries about market share losses and a fragile balance sheet, exacerbated by issues in its wind turbine division, Siemens Gamesa. 

However, the company has since outperformed these expectations, with solid order intake across segments, particularly in gas turbines, where demand has been bolstered by increasing electricity needs, especially in the U.S. and Europe.

Siemens Energy’s grid technology segment also contributed to the positive outlook, showing global growth beyond Europe. Investors are increasingly focusing on these areas of strength, even as challenges in the wind business persist. 

The market has largely priced in potential negative surprises from the wind segment, suggesting limited downside impact on the stock from this unit going forward.

JP Morgan also revised its price target for Siemens Energy, raising it to €32.80 from €13 by December 2025, signaling increased confidence in the company’s recovery trajectory. 

The upgrade comes as the company’s performance metrics show signs of stabilization, reducing the likelihood of immediate capital raises to shore up the balance sheet.

With strong orders and better-than-expected cash flow, the immediate risks that weighed on Siemens Energy’s stock have diminished, justifying the upward revision in JP Morgan’s outlook.

Source: Investing.com