Siemens Energy Charges Ahead on €2.5B Converter Option, Oman Turbine Deal and Record Backlog

Siemens Energy leaps to DAX top on €2.5B offshore converter option, Oman gas turbine contract with 20-year service, and record €154B order backlog. Third-quarter bookings beat consensus.

Siemens Energy shares vaulted to the top of the DAX on Tuesday, gaining 4.23 percent to €166.76, as a trio of catalysts converged: a huge offshore converter option, a gas turbine contract in Oman, and a management briefing that laid bare the extent of the company's structural tailwinds.

The stock's jump came after the company announced that, together with partner NSORe, it had secured the contract for the "North Sea Connector 2" – a subsea converter for a German offshore grid link. Crucially, the agreement includes an option on a second converter worth approximately €2.5 billion. Production will be handled at the Rostock facility, safeguarding more than 500 jobs. Separately, Siemens Energy will supply six F-class gas turbines and six generators for two new combined-cycle gas plants in Misfah and Duqm, Oman, with a combined capacity of 2.6 gigawatts. That deal also comes with 20-year service agreements.

The contract wins provided concrete evidence for the upbeat tone of the pre-close call held on Monday evening, days before the quiet period begins on July 1. Management told analysts and investors that third-quarter order intake is tracking at around €17.7 billion – roughly 4 percent above consensus expectations – driven by gas services and power transmission. On the margin front, gas turbines are set for a robust second half as demand diversifies and supply remains constrained, boosting pricing power.

In parallel, the group is investigating the long-term optimal structure for its "Transformation of Industry" unit, which employs roughly 17,000 people and generates annual sales of about €5.7 billion from industrial compressors and steam turbines. A decision on a potential spin-off or partial IPO has not yet been made, but the mere prospect of a more focused core business is resonating with investors. "A leaner Siemens Energy would make valuation far more transparent," one analyst remarked.

Analysts have responded positively across the board. Jefferies reiterated its buy rating with a €215 price target, citing growing confidence in the gas turbine market and grid expansion in the US. Metzler expects steam turbines and power transmission to surprise on the upside in the third quarter, while Citigroup noted that worries over a possible slowdown in gas orders have been shelved. Bernstein Research confirmed a €210 target.

The fundamental picture underpins that optimism. Siemens Energy's order backlog sits at a record €154 billion. The group's Gamesa wind unit is targeting an operational break-even this year, and for fiscal 2026 management forecasts net profit of roughly €4 billion and pre-tax free cash flow of about €8 billion. Revenue growth for the full year is pegged at 14-16 percent.

Technically, Tuesday's move carried the stock back above its 100-day moving average at €162.96. Year to date, the shares have gained 35.80 percent, though they remain about 15 percent below the 52-week high of €195.54 reached in April. With the quiet period now in effect, the next major event is the third-quarter results release on August 5, followed by a November 11 investor day where management will unveil strategic targets through 2030.