Siemens Energy Lifts Outlook After Stellar First Half, But Wind Division Remains the Wild Card

Siemens Energy lifts FY outlook after record €17.7B orders, doubled net income; but upgrade hinges on wind division Gamesa hitting breakeven by year-end.

Siemens Energy has raised its full-year guidance on the back of a record-breaking first half, with order intake surging nearly 30% to €17.7 billion and net income more than doubling to €1.44 billion. The new comparable revenue growth target of 14% to 16% — up from the previous 11% to 13% range — signals confidence in the core business, though management has placed one critical condition on the upgraded forecast: a return to breakeven at its struggling wind turbine division, Siemens Gamesa, by the end of the fiscal year.

The company’s grid and gas power segments are firing on all cylinders. Grid Technologies, the most profitable division with margins above 17%, is benefiting from the global drive toward electrification and digitalization. In the United States, orders more than doubled year-on-year, helping push the overall order backlog to a record €154 billion. Gasturbine sales also exceeded expectations, prompting analysts at Jefferies and JPMorgan to raise their price targets — to €215 and €225 respectively — while maintaining positive ratings.

The financial figures reflect this momentum. First-half revenue came in at just under €20 billion, comfortably ahead of market forecasts. Net income jumped sharply from the prior-year period, and the company has been actively returning capital to shareholders, having repurchased and cancelled more than 12 million shares since March. For the full year, Siemens Energy now expects a free cash flow before taxes of around €8 billion — double its earlier guidance — and an operating margin before special items of 10% to 12%.

Still, the wind business remains the most closely watched risk factor. Siemens Gamesa posted a quarterly loss of €44 million, a dramatic improvement from the €249 million loss in the same quarter last year, and its earnings margin recovered from minus 9.2% to minus 1.7%. But the division has not yet turned the corner, and management has explicitly tied the raised corporate guidance to Gamesa hitting breakeven by year-end. The offshore wind segment is expected to deliver the turnaround in the second half.

This conditionality has not gone unnoticed by investors or activists. Ananym Capital, an activist shareholder, is publicly pushing for a spin-off of Gamesa, arguing that its losses are dragging down the valuation of the highly profitable core business. Whether that pressure gains traction will depend on how convincingly the wind unit stabilizes over the coming months.

Analyst sentiment is broadly bullish, though targets vary. Among 25 analyst ratings compiled, 19 are buys, and the consensus price target stands at €169 — a modest discount to the current share price of around €175.50. The stock has rallied roughly 43% year-to-date and remains about 7% below its 52-week high of €188. Jefferies analyst Lucas Ferhani noted that both order intake and gasturbine performance again beat expectations, justifying the higher valuation.

Looking further ahead, Siemens Energy has set medium-term targets of €57.8 billion in annual revenue and €6.5 billion in profit by 2029. Achieving those ambitions will depend on scaling manufacturing efficiencies and sustaining the current momentum in electrification. Market participants expect the next major test of the Gamesa turnaround story when the company reports third-quarter results on August 5.