Analyst Note| Matthew Donen, CFA |
No-moat Siemens Gamesa downgraded its full-year EBIT guidance once again, as a combination of internal execution challenges and macroeconomic conditions saw operating losses deepen in its third quarter. An operating loss of EUR 343 million was recorded during the third quarter, which is the fifth consecutive quarter of operating losses for the group. Unforeseen costs of EUR 113 million due to component failures on onshore turbines led management to revise its full-year EBIT margin guidance to negative 5.5% from negative 4%. Management anticipates operating losses to continue in the following financial year. We anticipate revising our short-term forecasts, but will maintain our EUR 17.50 fair value estimate due to the impending takeover by Siemens Energy.