Siemens Energy Earnings: Record Order Backlog Underpins Impressive FY 2025 Guidance; Lift Fair Value

We’re raising our fair value estimate for no-moat Siemens Energy to EUR 27.50 from EUR 24 following its strong close to fiscal 2024. The group’s record order backlog of EUR 123 billion underpins its 8%-10% revenue growth guidance for fiscal 2025, comfortably beating our initial 3% forecast, which we have revised to 8.8%. We're also raising our estimate for four-year average profit-before-special-items margin from 6.2% to 7.3% to reflect an improvement in margin for the group's order backlog. We view shares as richly overvalued and remain cautious about the magnitude of the turnaround at Siemens Gamesa given the competitiveness of the industry.