Barclays has reclassified Siemens Energy AG from "equal weight" to "underweight" while increasing its 12-month price objective to €130 from €110 per share. The note highlights a central concern: the firm's market capitalisation of €145 billion, Barclays says, appears to be valuing the business as if current peak-cycle conditions are indefinite rather than temporary.
The brokerage presented a detailed forecast showing robust profit and top-line momentum. Barclays models an adjusted earnings-per-share compound annual growth rate of 25% through 2030, with adjusted EPS rising from €4.26 in fiscal 2026 to €9.20 in fiscal 2028. On revenue, the bank projects growth from €43.24 billion in fiscal 2026 to €57.41 billion in fiscal 2028, a compound annual growth rate of 13.7%.
Despite the upbeat operating outlook, Barclays argues the share price should de-rate because a cluster of peak conditions - strong demand for gas turbines, supply-demand tightness and elevated free cash flow - are all expected to occur at the same time in 2026. In that scenario, the broker anticipates a normalization of margins and volumes after the peak.
On the gas turbine franchise specifically, Barclays noted Siemens Energy secured orders equivalent to 50 gigawatts annualised over the past six months. The broker said that this level exceeds total global demand in any single year between 2017 and 2023. Still, Barclays estimates sustainable medium-term demand at 80 to 90 gigawatts per annum, which it describes as roughly 15% below current run rates.
Barclays also flagged a notable share shift. The bank estimates Siemens Energy’s market share has climbed to around 40%, compared with a historical average of 25% to 27%. Analysts expect that market-share gains are likely to normalise over time rather than remain at the elevated level.
Further, Barclays pointed to order flows for datacenter-related gas generation equipment. Major gas turbine and engine manufacturers have reportedly secured more than 70 gigawatts of datacenter-related orders or slot reservations in the past 15 to 18 months, the broker said. Barclays interprets this as covering the next three to four years of datacenter-related gas generation needs and therefore a potential reason for a material slowdown in ordering pace thereafter.
On free cash flow dynamics, Barclays projects equity free cash flow peaking at approximately €7.62 billion in fiscal 2026 before declining, and it notes that roughly two-thirds of this peak is expected to come from working capital movements. The broker warned net working capital is expected to become a "material headwind" from 2028.
Another factor that could limit shareholder returns, Barclays added, is a marked-to-market obligation of around $5 billion related to Siemens Energy’s plan to increase its ownership in Siemens Energy India to 51% in 2028.
Turning to valuation, Barclays calculated that Siemens Energy, on an adjusted basis, trades at a 20% to 35% discount to GE Vernova on forward free cash flow yield and EV/EBITDA multiples. The broker noted that this gap is materially narrower than standard Bloomberg comparisons suggest.
Barclays outlined key upside scenarios that could challenge its cautious stance. These include potential margin outperformance in the Grid business, investor anticipation of newly announced 2030 targets, and the possibility of a headline valuation discount to GE Vernova on 2028 multiples that attracts investor attention.
What Barclays changed
- Rating: downgraded from "equal weight" to "underweight"
- Price target: raised to €130 from €110
- Market capitalisation flagged: €145 billion
Forecast highlights
- Adjusted EPS: €4.26 in fiscal 2026 to €9.20 in fiscal 2028
- EPS CAGR through 2030: 25%
- Revenue: €43.24 billion in fiscal 2026 to €57.41 billion in fiscal 2028 (CAGR 13.7%)
- Equity free cash flow peak: ~€7.62 billion in fiscal 2026