Kepler Cheuvreux has upgraded Siemens AG to “hold” from “reduce”, raising its price target to €280 from €255 as it expects the German engineering group to reach a “pivotal point” ahead of its third-quarter results on 6 August.
The brokerage said it had lifted its earnings forecasts for the 2026-2028 period to levels above market consensus, reflecting improving prospects across the company’s industrial businesses.
Shares in Siemens closed at €276.90 on 2 July, leaving the new €280 target implying a modest upside of around 1.1%. The company had a market capitalisation of approximately €212.2 billion at the close.
Kepler Cheuvreux said downside risks to forecasts for the Digital Industries automation business had become minimal, while the re-rating of industrial software assets had largely run its course. It also noted that the deconsolidation of Siemens Healthineers was drawing closer.
The broker expects Siemens to enter what it described as “a new era” from early 2027, with an increased focus on leadership in industrial software and hardware markets. It believes the group’s portfolio will be capable of delivering high single-digit growth over the longer term.
Despite the improved outlook, Kepler Cheuvreux cautioned that much of the company’s valuation re-rating had already occurred over the past year and said uncertainty remained over the pace of the industrial cycle’s recovery.
Looking ahead to the August results, the brokerage expects positive operational leverage in the Digital Industries division and rising volumes at Smart Infrastructure to support earnings ahead of current market expectations. It also sees potential for Siemens to raise its margin guidance.
Kepler Cheuvreux said the 2027-2030 period should deliver a significant improvement in operating profitability for Siemens’ industrial software business as investments made over more than three years to transition towards a full software-as-a-service (SaaS) model begin to generate stronger returns.
The broker also highlighted rapid order growth within Smart Infrastructure, saying an expanding order backlog should support stronger-than-expected revenue growth in the Electrification business.
For fiscal 2026, Kepler Cheuvreux forecasts revenue of €83.19 billion, rising to €90.90 billion in 2027 and €96.09 billion in 2028.
Adjusted EBITDA is projected to increase from €15.24 billion in 2026 to €17.08 billion in 2027 and €19.08 billion in 2028, while adjusted EBIT is expected to grow from €11.82 billion to €13.44 billion and €15.23 billion over the same period.
Adjusted net profit is forecast to reach €9.36 billion in 2026, rising to €10.74 billion in 2027 and €12.20 billion in 2028. Net financial debt is expected to decline steadily to €39.95 billion, €35.88 billion and €30.34 billion, respectively.
The brokerage forecasts adjusted fully diluted earnings per share of €12.21 in 2026, €14.21 in 2027 and €16.15 in 2028, exceeding consensus estimates of €10.90, €12.70 and €14.20. It also expects net dividends of €5.75, €6.30 and €6.75 per share over the three-year period.
