Siemens Energy’s Record Order Book Fails to Lift the Stock as Margins Take Centre Stage

Siemens Energy has piled up record orders worth €17.7 billion in its second quarter, lifted its net profit forecast to around €4 billion for the 2026 financial year, and kicked off a €1 billion share buyback. Yet the stock has drifted nearly 20% below its 52-week high, closing recently at €156.46. The disconnect between operational momentum and market sentiment is widening, and analysts are split on what will finally close the gap.

Deutsche Bank’s Gael de-Bray sees a key source of value that remains undervalued: the service business. While fears of gas-turbine overcapacity have weighed on the sector, he argues they are overblown because new-build equipment accounts for only about 15% of total revenue. The real margin engine is the aftermarket service segment, which generates far higher returns and is often overlooked by the capital markets. Deutsche Bank reiterates its buy rating with a €200 price target.

The buyback, launched on 4 June and running until the end of September, allows the company to repurchase shares worth up to €1 billion. Proceeds will partly fund equity-based compensation and partly be used for share cancellations. The move follows a strong quarter in which Siemens Energy booked net income of €835 million and once again raised its full-year guidance. The management now expects net profit of roughly €4 billion for fiscal 2026.

Should investors sell immediately? Or is it worth buying Siemens Energy?

At the same time, the group is strengthening its strategic position. Siemens Energy became an anchor investor in the initial public offering of ASTA Energy Solutions, a move designed to secure critical components for power transmission and support its grid-expansion plans. That division is increasingly central to the story: Jefferies analyst Lucas Ferhani recently lifted his price target to €215, citing accelerating order momentum in grid infrastructure and Siemens Energy’s growing role in European and US energy-transition projects. The broader analyst consensus sits near €195, with targets ranging as high as €250.

For all the bullishness, the share has lost more than 12% over the past month and the relative strength index has dropped to 38, indicating oversold conditions. Investors appear to be waiting for concrete proof that operational strength translates into margin expansion, especially at the troubled wind-turbine subsidiary Gamesa. The turnaround there remains the single biggest valuation lever, and the next major test comes on 5 August, when Siemens Energy reports third-quarter results. The market will be watching free cash flow closely: management has set a full-year target of roughly €8 billion.

Until then, the stock sits in a tug-of-war between record backlog, a generous buyback, and lingering doubts about execution — particularly in the wind business. The service-driven margin story may be the hidden catalyst Deutsche Bank believes it is, but the share price needs to see it, too.

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