A record order backlog of 154 billion euros. And the market is worried, not pleased.
Siemens Energy $ENR.DE published its second fiscal quarter results in May with a record order intake of €17.7 billion and raised its full-year profit outlook to around €4 billion of net income. The order backlog climbed to €154 billion, the highest figure in the company’s history. Yet the stock lost around 9.6% in a single week in July and is trading around €152, roughly a fifth below its April high of €195.5.
Key points
Record orders against a falling share price. The order cushion of €154 billion equates to roughly four times annual revenue, yet the stock lost 9.6% in a single July week and is trading around €152, about a fifth below the April peak of €195.5.
Profitability rose from 6% to a target of 10% to 12%. The drivers were repricing of the order book amid gas turbine prices that, according to Wood Mackenzie, surged by 195%, an end to losses at Siemens Gamesa, and operating leverage in the grids segment, for which the company lifted its margin outlook to 18–20% two years earlier than planned.
The balance sheet today is the opposite of the situation in 2023. A BBB+ rating with a stable outlook, the target of a net cash position by 2028, and €6 billion in share buybacks contrast with a time when the company, after a €4.59 billion loss, needed €7.5 billion in state guarantees.
The main risk is order normalization and the quality of cash flow. Barclays calculates roughly an annualized 50 GW over the last six months, exceeding the global annual demand of any year between 2017 and 2023, and estimates sustainable demand at 90 GW versus the 110 to 120 GW cited by management. A substantial part of the €8 billion free cash flow outlook moreover comes from advance payments for machines not yet built.
The valuation is cheaper than a competitor’s, but there is no consensus on it. A roughly 32 times multiple of targeted FY2026 earnings is a significant gap versus GE Vernova’s approximately 60 times, yet analysts’ target prices range from €100 to €250. Third‑quarter results on 5 August 2026 will provide new data.
The disconnect between operating numbers and share‑price behaviour has split even analysts. Barclays cut its recommendation to Underweight, while JPMorgan in the same week raised its target price to €235. Exactly where the boundary lies between structural demand for energy infrastructure and the fear that the current cycle is nearing its peak is revealed by a look beneath the surface of the company’s individual segments.
Four segments, two speeds: where profit is being made today
Siemens Energy came into being through the spin‑off of the Gas and Power division from Siemens AG and has been trading independently on the Frankfurt Stock Exchange since the end of September 2020. Today it is a DAX constituent, employs roughly 103,000 people in more than 90 countries, and reported revenue of €39.1 billion with net income of €1.69 billion for fiscal 2025. By its own estimate, the company’s technology is behind the generation of roughly one sixth of the world’s electricity. For fiscal 2025 the company proposed a dividend of €0.70 per share, the first payout since 2022.
The company reports four business units, and their contributions to results are markedly uneven today. Gas Services supplies and services gas and steam turbines and generators. Grid Technologies manufactures transformers, switchgear, and high‑voltage direct‑current (HVDC) transmission systems – that is, technology for transmitting large volumes of energy over long distances with low losses. Transformation of Industry covers industrial compressors, steam turbines, heat pumps, and electrolysers for hydrogen production. Siemens Gamesa manufactures onshore and offshore wind turbines.
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