The shares of Siemens Energy, which have already been badly hit this year, will once again be in free fall on Thursday. The price collapsed by almost 36 percent in the morning to a record low of 6.84 euros. Most recently, Siemens Energy shares traded 30.10 percent lower at 7.44 euros via XETRA. Responsible for the share price debacle was the company’s confirmation of negotiations with the federal government over billion-dollar guarantees. “Wirtschaftswoche” (Wiwo) had previously reported.
According to the group, preliminary discussions are now being held with various parties for guarantees, including partner banks and the federal government. Measures to strengthen the balance sheet are being examined. “On the topics New debt and financing problems, stock market investors are currently reacting very allergically and are immediately distancing themselves from the company,” said market expert Andreas Lipkow.
According to its own information, Siemens Energy will probably miss the market estimates for the wind business in 2024. According to analyst Akash Gupta from JPMorgan, the risk of a capital increase is now increasing.
“Without the guarantees, the company might have to forego large orders,” writes “Wiwo”. “The ex-mother Siemens is also supposed to step in, but is reluctant.” Siemens shares recently fell by almost four percent. Siemens still holds shares in the former subsidiary.
Siemens Energy has long been assuming an annual loss of several billion euros due to the massive problems in the wind business. With a loss of more than 60 percent, the shares will be at the bottom of the DAX 40 in 2023. The company seems to have massively choked on the Gamesa chunk, says Lipkow.
At the end of June, Siemens Energy’s shares had already posted a daily loss of a similar magnitude to Thursday’s, a loss of just over 37 percent, because the profit forecast had to be withdrawn due to ongoing problems at the wind power subsidiary Gamesa. This makes Siemens Energy one of the top ten biggest DAX daily losers.
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Siemens Energy is now only worth a good five and a half billion euros on the stock exchange.
Market expectations at Gamesa are too high
Siemens Energy will once again miss market expectations in the wind energy business of its subsidiary Gamesa. Incoming orders and sales are expected to be below market expectations in 2023, and net losses and cash outflows are expected to be above them, the company announced in Munich. The reason given was that Siemens Gamesa is not concluding any new contracts for certain onshore platforms for the time being and is only accepting orders selectively in the offshore business.
However, the group’s financial figures are likely to be “fully within the forecast,” according to the company.
At the former gas and power business units, strong growth in order intake is leading to increasing need for guarantees for long-term projects, it said. The Executive Board is therefore examining various measures to strengthen Siemens Energy’s balance sheet and is holding preliminary discussions with partner banks and the federal government in order to ensure access to a growing volume of guarantees that will enable the expected strong growth.
In the morning, Wirtschaftswoche reported on negotiations about federal guarantees.
JPMorgan leaves Siemens Energy at ‘neutral’ – target 16.70 euros
The US bank JPMorgan has left the rating for Siemens Energy at “neutral” with a price target of 16.70 euros. The risk of a capital increase is increasing, wrote analyst Akash Gupta in a study available on Thursday, after the energy technology group had to lower its expectations for the wind power subsidiary Gamesa for 2024. Confidence in management’s ability to address Gamesa’s problems has fallen after two profit warnings this year, Gupta said.
FRANKFURT (Dow Jones) / MUNICH/BERLIN (dpa-AFX) / NEW YORK (dpa-AFX)
Image source: Siemens Energy AG