Hydrogen-Ready Desert Megaproject Bolsters Siemens Energy's Record Backlog as Peak-Cycle Doubts Creep In

Despite a record €154B backlog and a major Oman gas turbine deal, Siemens Energy shares slide 7% as analysts question valuation sustainability and cyclical peak risks.

The order machine at Siemens Energy is showing no signs of slowing. A 2.6-gigawatt contract for two gas-fired power plants in Oman — complete with a hydrogen-capable design and long-term service agreements — has been added to a bookshelf that already groaned under a record €154 billion in outstanding work. Yet the shares have slid roughly 7% over the past week, trading at €156.54, and sit some 20% below the April high of €195.54. The reason: a growing chorus of analysts question whether the current order bonanza can sustain the valuation that the stock has built after a 27.48% year-to-date surge.

The Oman deal, awarded for the Misfah and Duqm projects, includes gas and steam turbines plus generators, with the option to switch to hydrogen fuel as the sultanate pursues its decarbonisation targets. Crucially, the contract wraps in multi-year service revenue — the kind of recurring income investors prize for stabilising cash flows during cyclical downturns. The news lands just weeks after Siemens Energy posted a 30% jump in second-quarter order intake to €17.7 billion, driven heavily by grid technology that benefits from the power demands of data centres. Management responded by raising its full-year revenue forecast to 14-16% growth.

But Barclays has thrown cold water on the party. Analyst Vlad Sergievskii downgraded the stock from Equal Weight to Underweight, even as he nudged his price target up from €110 to €130 — still well below the current market price. His thesis: the gas turbine business has reached its cyclical peak. Barclays notes that Siemens Energy has booked roughly 50 gigawatts of turbine orders in recent months, far exceeding the historical average of global annual demand. While the bank expects a record free cash flow of around €7.62 billion in fiscal 2026, it warns that normalisation thereafter is likely.

That caution resonates with other bearish arguments already on the table. The stock's price-to-earnings multiple remains elevated, and with a volatility reading of nearly 60%, the shares are prone to sudden sell-offs. The ongoing losses at wind turbine subsidiary Siemens Gamesa continue to drag on group margins, and the execution risk attached to the huge backlog — turning orders into profit — is a constant concern. On the chart, the 200-day moving average near €142.49 provides a solid floor; the current price has slipped just below the 50-day line, but has not yet breached the longer-term trend support.

Bullish catalysts are not hard to find alongside the caution. The company is buying back €1 billion of its own shares through September, and Moody's recently upgraded its rating outlook to positive. The grid division, in particular, is riding a structural wave from electrification and data-centre construction. And the Oman contract shows that Siemens Energy is also embedding itself in the future hydrogen economy.

The next major test for the bulls comes on 5 August 2026, when the group reports third-quarter earnings. The market will be looking for evidence that Gamesa is finally turning around and that the cash flow from those record orders is building, not just the order backlog itself. If the numbers disappoint, the peak-cycle narrative may well take centre stage. If they deliver, the valuation debate could quickly fade.