Has Siemens Rally Left Much Upside or Do Fundamentals Suggest Further Room to Run?

• Wondering if Siemens is still a smart buy after its strong run, or if the best days are already priced in? This article unpacks what the current share price really implies about future value.
• The stock has slipped a modest 0.3% over the last week but is still up 8.1% over 30 days, 24.9% year to date, 27.7% over the past year, and 99.1% over 3 years and 130.9% over 5 years, which naturally raises the question of how much upside is left.
• Recent attention around Siemens has focused on its strategic push deeper into digital industries and smart infrastructure, as well as ongoing portfolio simplification that aims to sharpen its focus on high margin, scalable businesses. These moves help explain why investors have been willing to re rate the stock, seeing a more streamlined industrial tech leader rather than a traditional conglomerate.
• Even after this rally, Siemens scores a 4 out of 6 on our undervaluation checks, suggesting the market may not be fully reflecting its fundamentals yet. Next, we break down what different valuation approaches say about the stock today, and later on we look at a more holistic way to judge whether Siemens is truly good value.

Siemens delivered 27.7% returns over the last year. See how this stacks up to the rest of the Industrials industry.

Approach 1: Siemens Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth by projecting its future cash flows and discounting them back to today’s value. For Siemens, the model uses a 2 stage Free Cash Flow to Equity approach, based on cash flow projections in €.

Siemens generated trailing twelve month free cash flow of about €10.96 billion, and analysts expect this to rise to roughly €11.12 billion by 2030. The detailed 10 year forecast shows free cash flow broadly holding in the €9 to €11 billion range, with the later years extrapolated beyond explicit analyst estimates to reflect a maturing but still robust cash generating profile.

Applying these cash flows in the DCF framework results in an estimated intrinsic value of about €298.79 per share. When compared with the current share price, this estimate implies that Siemens is trading at a 20.9% discount to its calculated fair value. This indicates that, under the assumptions used in the model, the market may not be fully reflecting its longer term cash generation.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Siemens is undervalued by 20.9%. Track this in your watchlist or portfolio, or discover 918 more undervalued stocks based on cash flows.

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

Approach 2: Siemens Price vs Earnings

For consistently profitable companies like Siemens, the price to earnings (PE) ratio is a useful yardstick because it shows how many euros investors are willing to pay for each euro of current earnings. In general, stronger growth prospects and lower perceived risk justify a higher PE, while slower growth or higher risk call for a lower, more conservative multiple.

Siemens currently trades on a PE of about 24.3x. That is roughly double the wider Industrials sector average of around 12.2x, but still well below the 46.5x average commanded by closer peers. To move beyond these broad comparisons, Simply Wall St calculates a proprietary “Fair Ratio” for Siemens of about 30.0x, which estimates the PE the stock should trade on after factoring in its earnings growth outlook, profit margins, risk profile, industry positioning and market cap.

This Fair Ratio offers a more tailored benchmark than simple peer or sector averages, because it explicitly adjusts for Siemens specific strengths and risks rather than assuming all Industrials or peers deserve the same multiple. Comparing Siemens current 24.3x PE to its 30.0x Fair Ratio suggests the shares still trade at a meaningful discount to where they could reasonably sit.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Siemens Narrative

Earlier we mentioned that there is an even better way to understand valuation. So let's introduce you to Narratives, a simple framework on Simply Wall St's Community page that lets you attach a clear story to your numbers. You do this by linking what you believe about Siemens future revenue, earnings and margins to a concrete financial forecast and a resulting fair value. You can then compare that fair value to today’s share price to decide whether it looks like a buy or a sell.

Each Narrative automatically refreshes as new earnings, news and guidance come in. This allows you to see, for example, how one investor might build an optimistic Siemens Narrative that leans into automation, data center and AI tailwinds to justify a fair value closer to €300. Another investor might focus on macro risks, lower margin electrification and execution challenges to land nearer €185. This gives you a clear, dynamic range of perspectives to learn from, pressure test and ultimately adapt into your own, more confident investment decision.

Do you think there's more to the story for Siemens? 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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