Analyst Note| Denise Molina, CFA |
Siemens pre-released first-quarter results earlier so the full first-quarter release incremental news was mainly management's increased guidance for 2021 with China and semiconductor demand driving the outlook. We increased our fair value estimate by 5% to EUR 124 per share from EUR 118 per share to account for a quicker recovery in margins and demand than we had previously expected. Our ADR fair value increases to USD 75 from USD 65. Across the divisions, we forecast 5%-10% organic 2021 growth, with a rebound in demand for digital industries from selected end markets and Healthineers as well. We expect currency headwinds to take around 250 basis points off reported growth. Even though we expect to see a demand recovery this year, continued lockdowns in the first half of the 2021 fiscal year will make a full demand recovery challenging outside of selected end markets like semis and automotive. Therefore, we're modelling 2022 as the first year of growth over prepandemic levels.