Siemens Energy’s €6 Billion Buyback Faces Activist Showdown Over Gamesa’s Future

Siemens Energy sees record grid orders and upgraded 2026 outlook, but activist hedge fund Ananym Capital pushes for spin-off of struggling wind unit Gamesa.

Siemens Energy is running at two speeds. The grid division is on fire, booking record orders and forcing management to tear up its own forecasts. But the wind turbine subsidiary, Siemens Gamesa, remains a stubborn liability that has now attracted the attention of an activist hedge fund demanding a breakup.

The US-based fund Ananym Capital has publicly called for a strategic review of the wind power unit. Co-founder Charlie Penner argues that a full spin-off could deliver shareholders a return of as much as 60 percent. The demand lands just weeks before the company’s half-year results on May 12, when investors will scrutinize whether Gamesa is finally on track to hit breakeven in the second half of 2026.

Management has so far stuck to the integrated structure, pointing to genuine progress. Gamesa’s quarterly loss narrowed sharply to €46 million, and the full-year target of reaching the breakeven point remains intact. The second half of 2026 is supposed to deliver the decisive turnaround. If it does not, the activist case for a split will gain serious momentum.

The rest of the business, however, is delivering numbers that make the case for staying the course. Grid Technologies, the division that builds equipment for power transmission networks, posted order growth of 41 percent. Group-wide, incoming orders hit €17.75 billion, a comparable increase of 29.5 percent that smashed the market consensus of €15.63 billion. Free cash flow before taxes reached €1.975 billion.

That operational strength has prompted a dramatic upgrade to the 2026 outlook. Comparable revenue growth is now expected at 14 to 16 percent, up from a previous range of 11 to 13 percent. The adjusted operating margin has been raised to 10 to 12 percent. Net profit is forecast at roughly €4 billion. Free cash flow has been lifted even more sharply, to around €8 billion from an earlier estimate of €4 billion to €5 billion.

Bank of America responded by hiking its cash flow estimates for 2026 by 40 percent. The bank now sits 42 percent above the consensus, a sign that many analysts may still be underestimating the pace of the grid boom.

The buyback program is accelerating alongside the upgraded guidance. Siemens Energy repurchased roughly 635,000 of its own shares last week alone. The overall program targets up to €6 billion in buybacks by the end of 2028, with the first tranche of up to €2 billion running until September 2026. Combined with dividends, the company plans to return around €10 billion to shareholders over the next two years.

The stock is trading at roughly €186, just shy of its 52-week high of €188. Since the start of the year, the share price has climbed more than 51 percent. Analyst opinions diverge sharply on where it goes from here. JPMorgan has a buy rating and a €200 price target. Goldman Sachs sees fair value at €185. At the other end of the spectrum, the lowest target sits at just €89, reflecting deep skepticism about the valuation.

Management has flagged a risk of low triple-digit million euros from US trade tariffs, but notes that 28 production sites in the US provide a natural hedge.

The half-year report on May 12 will be the next major catalyst. Investors will focus on free cash flow and Gamesa’s margin trajectory. If the wind division misses its self-imposed targets, the activist push for a spin-off will become much harder for the board to ignore.