The Siemens Energy Investment Thesis Hinges on Its Wind Division

Siemens Energy aims for Siemens Gamesa break-even in 2026, backed by strong Q1 results and a €6B buyback, as it gains independence from Siemens AG.

A significant shift in shareholder ownership has brought the company's central challenge into sharp focus: Can Siemens Energy successfully execute the turnaround of its troubled Siemens Gamesa wind unit? The recent reduction of Siemens AG's voting rights stake from nearly 15% to 5.54% in Siemens Energy marks a decisive move toward independence from its former parent corporation.

Break-Even Target is the Critical Catalyst

Management has set a clear benchmark for the current fiscal year: achieving a break-even result at Siemens Gamesa. According to official projections, the first half will remain in negative territory, with profitability expected in the second half. The validity of this forecast will be tested on May 12, 2026, when Siemens Energy releases its second-quarter figures.

The broader corporate targets for fiscal 2026 include revenue growth of 11 to 13 percent and an adjusted profit margin between 9 and 11 percent. Looking further ahead to 2028, the company aims to lift that margin to a range of 14 to 16 percent. This financial roadmap is supported by a share buyback program of up to €6 billion. Analysts at JPMorgan suggest that a successful Gamesa recovery could drive the share price toward €200. The equity has already appreciated approximately 21% since the start of the year, indicating a solid foundation, with the wind division remaining the pivotal piece of the puzzle.

Strong Operational Performance, Yet a Persistent Overhang

The first quarter of fiscal 2026 delivered robust figures. Adjusted profit more than doubled to €1.16 billion, driven primarily by the Grid Technologies division and, notably, by Siemens Gamesa itself. New orders surged by 33 percent to €17.6 billion, pushing the order backlog to a record €146 billion. The company's investor relations chief, Tobias Hang, noted that gas turbines are fully booked through 2028.

Despite this operational progress, Gamesa continues to leave its mark on the financial statements. One-time special effects from the sale of the Indian wind business weighed on the quarterly result by €175 million, even as the division showed marked operational improvement.