Profit opportunity ahead: Deutsche Bank raises Siemens price target to €185

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Profit opportunity ahead: Deutsche Bank raises Siemens price target to €185
Credit: © Reuters. -- Deutsche Bank has raised its price target for Siemens (NS: SIEM ) (ETR: SIEGn ) (OTC: SIEGY ) shares by €10 to €185 (€1=$1.0776) in a statement released on Wednesday. This results in an earnings potential of around 19%, based on yesterday's closing price.

Bank experts have exchanged views with CFO Ralf P. Thomas and pointed out Siemens' growing focus on digital solutions, resource efficiency, and decarbonization. They emphasized the company's increasing success in these areas. As a result, the order backlog of the German industrial conglomerate till fiscal 2024 can be predicted already.

Thomas expects a recession but believes it will be "mild" and last less than two quarters. He anticipates that such an economic scenario will hardly have any negative impact on Siemens' business and that a decline in sales is extremely unlikely.

According to Deutsche Bank, Siemens benefits from long-term growth drivers. The bank expects an average annual growth rate (CAGR) of 7% for the period from 2022 to 2027. In this context, the group is expected to eventually increase both the medium-term margin targets for Digital Industries (DI) and Smart Infrastructure (SI). This will be supported by the company's first-class product offering, digital expertise, and value-based pricing strategy.

On balance, the DB analysts have raised their earnings estimates (EPS) by 8% for 2023 and by 5% on average thereafter.

"With a new TP of €185, we continue to see the shares as significantly undervalued," the analysts concluded.

On the trading platform Tradegate, Siemens shares (TG: SIEGn ) lost just under 0.21% to €153.88 shortly before the start of trading in Frankfurt.

(Translated from German)

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