Siemens Energy Races to Convert €154 Billion Backlog as Gamesa’s Profitability Deadline Looms

Siemens Energy retires 12M+ shares as cash flow surges on record orders. Guidance raised but full-year outlook depends on wind unit Gamesa breakeven. Analysts bullish on core, wary of wind.

Siemens Energy has quietly stepped up its share buyback, retiring more than 12 million shares since March 2026, as a flood of customer prepayments in the grid and gas turbine businesses turbocharges cash flow. The accelerated repurchases signal a management team increasingly confident in the group’s industrial momentum — but the spectre of its wind turbine subsidiary still haunts the outlook.

In the first half of fiscal 2026, revenue hit nearly €20 billion and net income climbed to €1.44 billion, more than doubling earnings per share from continuing operations versus the prior-year period. The operating cash flow surge, driven largely by advances on Grid Technologies and gas turbine orders, has given executives the firepower to reduce dilution and bolster per-share earnings.

That financial muscle is backed by an unprecedented order book. Order intake in the second quarter jumped almost 30% to €17.7 billion — a fresh record — pushing the total backlog to €154 billion. The United States was the standout market, where incoming orders more than doubled year-on-year. Grid Technologies, the most profitable division with margins above 17%, continues to benefit from the global electrification and digitalisation push.

The strong top-line performance prompted management to lift full-year guidance. Comparable revenue growth is now expected at 14% to 16%, up from the previous 11% to 13% range. The adjusted operating margin target has been raised to 10%–12%, while forecast free cash flow before taxes has been doubled to around €8 billion.

But there is a catch: the entire upgraded outlook hinges on Siemens Gamesa reaching breakeven by the end of the fiscal year. The wind power unit remains in the red, though its quarterly loss narrowed sharply to €44 million from €249 million a year earlier, and its margin improved from minus 9.2% to minus 1.7%. Management is banking on the offshore business to deliver the turnaround in the second half. If Gamesa stumbles, the group’s ambitious targets could come under threat.

Analysts are growing more bullish on the core business but remain cautious on the wind exposure. TipRanks rates the stock a “Buy” with a €200 price target, flagging long-term cost control on large projects as a residual risk — a concern heightened by the record backlog. Jefferies lifted its target to €215, keeping a “Buy” rating, while JPMorgan raised its price objective to €225 with an “Overweight” stance. The consensus from 25 analysts sits at €169, with 19 recommending a buy. Activist investor Ananym Capital has stepped up pressure, calling for a spin-off of Gamesa on the grounds that its losses depress the valuation of the thriving electrification business.

Shares currently trade around €175.50, up roughly 43% year-to-date and about 33% above their 200-day moving average. That still leaves them nearly 7% below the 52-week high of €188. The next major catalyst arrives on August 5, when Siemens Energy publishes its third-quarter report. Between now and then, the pace of backlog conversion and the trajectory of the buyback programme will provide the clearest signals on whether the stock can break to new highs — or whether Gamesa’s stubborn losses will hold it back.