Is Siemens Energy’s Surge Justified After Major Wind Division Contract in 2025?

• Wondering if Siemens Energy is truly a bargain or if the price has run ahead of itself? Let's look beneath the headline numbers to figure out the story behind the stock's value.
• Siemens Energy has been on a remarkable run, with shares up 1.5% over the past week, 6.9% for the month, 114.3% year-to-date, and 138.8% over the past year.
• The recent surge has caught the market's attention, especially after Siemens Energy secured a major contract for wind turbine maintenance and announced progress in restructuring its struggling wind division. These updates have pushed investor sentiment, hinting at both renewed optimism and ongoing uncertainty.
• Despite the excitement, Siemens Energy scores a 0 out of 6 on our valuation checks, meaning it is not undervalued in any of the metrics we track. Up next, we will break down how the company's price stacks up under different valuation approaches, and at the end, reveal a smarter way to make sense of its current market value.

Siemens Energy scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Siemens Energy Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company’s true value by projecting its future cash flows and discounting them back to today’s value. This approach helps assess whether the current stock price appropriately reflects expected future performance.

For Siemens Energy, analysts estimate current Free Cash Flow (FCF) at approximately €4.15 billion. Looking ahead, projections suggest FCF will decline to around €1.27 billion by 2029. Beyond the next five years, cash flow estimates are extrapolated and by 2035, FCF is forecast to be about €0.88 billion. These projections use a two-stage model, starting with higher-accuracy near-term analyst estimates and then applying longer-term growth assumptions.

Based on these future cash flows, the DCF model calculates an intrinsic value of €28.12 per share. This is significantly lower than Siemens Energy’s current share price, implying the stock is about 287.5% overvalued according to this approach. In other words, the market price appears far ahead of what the company’s future cash generation would justify.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Siemens Energy may be overvalued by 287.5%. Discover 900 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Siemens Energy.

Approach 2: Siemens Energy Price vs Earnings

The Price-to-Earnings (PE) ratio is a widely used valuation metric for profitable companies because it helps investors assess how much they are paying for each euro of current earnings. A higher PE ratio often signals higher growth expectations but can also reflect greater risk or over-optimism. A lower ratio may suggest caution about future prospects or undervaluation.

Siemens Energy currently trades at a PE ratio of 65.6x. This is well above the Electrical industry average of 29.7x and its peer average of 46.4x. These comparisons indicate that the market is pricing Siemens Energy at a significant premium, possibly in anticipation of higher growth or improved profitability relative to other companies in its sector.

Simply Wall St uses a “Fair Ratio” to offer a deeper, more customized benchmark. The Fair Ratio for Siemens Energy is calculated at 48.7x, factoring in the company’s unique earnings growth outlook, risk profile, profit margins, market capitalization, and its place within the industry. Unlike industry or peer averages, the Fair Ratio is designed to account for the specifics that matter most to a business’s future prospects and risk, providing a more relevant valuation anchor.

Comparing Siemens Energy’s actual PE of 65.6x to its Fair Ratio of 48.7x suggests the stock is trading at a notable premium and may be overvalued according to this method.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Siemens Energy Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives, a powerful, user-friendly tool that connects your perspective on Siemens Energy’s story with a clear financial forecast and fair value estimate.

Instead of relying only on headline numbers, Narratives let you anchor your investment decisions in a story, using your own assumptions about the company’s future revenue, earnings, and profit margins. By linking the company’s specific situation to real financial models, Narratives help you see whether the current price looks cheap or expensive, all based on your outlook.

This approach makes valuation more personal and dynamic. Narratives are easy to create and explore; millions of investors on Simply Wall St’s Community page already use them. Each Narrative instantly updates with new information, like breaking news or earnings results, so your view is always current.

For Siemens Energy, one investor might believe rapid sector growth and successful wind division restructuring justify a high fair value, while another sees execution risks and profit margin uncertainty pointing to a much lower number. Narratives help you step beyond averages and market chatter, giving you control over your own investment decisions and updating your insights as new data rolls in.

Do you think there's more to the story for Siemens Energy? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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