Siemens Energy’s Buyback Blitz Leaves Critics Behind as Deutsche Bank Champions €200 Target

Siemens Energy rapidly consumes first €2B share buyback with only €32M left; strong cash flow from AI and grid demand fuels aggressive capital return plans, despite gas turbine peak fears.

Siemens Energy has chewed through its first €2 billion share buyback authorization with such ferocity that only €32 million remains unspent — and the original deadline is still three months away. The pace has caught even seasoned market observers off guard. Since the program kicked off, the company has repurchased roughly 12.4 million of its own shares, with more than 800,000 changing hands in the third week of May alone across Xetra and multilateral trading platforms. Yet a growing chorus of skeptics worries that orders for gas turbines may have peaked, creating a curious split between the company’s aggressive capital-return strategy and the market’s cautious sentiment.

What makes the sprint possible is a cash flow surge that few anticipated. Free cash flow before taxes jumped 42% in the second quarter to nearly €1.98 billion, fuelled in part by hefty advance payments. Siemens Energy now expects around €8 billion in free cash flow for the full 2026 fiscal year — double the original guidance range. The cash engine is also being fed by a record order intake of €17.7 billion, largely driven by data centre build-outs for artificial intelligence and high-voltage grid expansion. The total order backlog stands at a staggering €154 billion, providing multi-year revenue visibility. Management has set an operational margin target of 10% to 12% for the current year.

With the first tranche nearly exhausted, Siemens Energy has already flagged an additional €1 billion buyback to be deployed within the current fiscal year. That would lift total shareholder distributions to as much as €3.6 billion, including the €0.6 billion dividend paid in March. By the end of fiscal 2028, the company intends to return €6 billion through buybacks alone. The dividend trajectory is also steepening: analysts project a payout of €1.84 per share for the current year, more than double last year’s €0.70.

Deutsche Bank sees the glass as half full — and then some. Analyst Gael de-Bray reiterated his buy rating with an unchanged price target of €200, arguing that the market’s fears about peaking gas-turbine orders overlook two structural growth engines. First, the aftermarket business: as the installed base of power plants expands, spare parts and service revenue will naturally grow, and that segment is expected to become a material contributor from 2030. Second, the global grid build-out, where Siemens Energy benefits from persistent, structurally high demand for transmission infrastructure. De-Bray also points to November as a potential catalyst, when the company could announce an extension of its buyback program — another signal of its commitment to stepped-up capital returns.

Shares traded Friday at €174.60, down fractionally on the day but still up roughly 42% year-to-date. The stock sits comfortably above its 200-day moving average of €131.40, although it remains about 7% below the 52-week high of €188 reached in late April. For the stock to challenge Deutsche Bank’s €200 target, the market will need more than buyback momentum — it will want operational proof. The next scheduled check-in comes on 5 August 2026, when Siemens Energy reports third-quarter results. The central question will be whether the blistering pace of the first €2 billion buyback also becomes the template for the next €1 billion, and whether the naysayers are proven wrong on gas-turbine orders.