HSBC maintains Buy on Siemens Energy AG and raises target price to EUR205

Overview

This is an HSBC company update and Q3 FY26 earnings preview report on Siemens Energy AG. The core conclusion is to maintain a Buy rating and raise the target price from EUR190 to EUR205. HSBC believes that the company's share price has fallen 19% since its peak on 24 April 2026, significantly underperforming the FTSE World Industrials, which is up 1%, thereby reducing to some extent the expectation risk around the upcoming Q3 FY26 results.

Core views

There are three core views. First, gas turbine orders and GW commitments in Gas Services remain in a strong demand cycle, with ENR expected to reach 90-100GW of total commitments in FY26, and HSBC maintaining a positive view based on annual gas turbine market demand of 110-120GW over the coming years. Second, Grid Technologies is a more structural growth story, with electrification, renewable grid connection, and aging-grid upgrades supporting orders and pricing. Third, Siemens Gamesa is expected to move toward profitability in H2 FY26, and higher offshore wind delivery volumes along with progress in resolving quality issues should improve confidence in long-term earnings.

Analysis framework

The report uses a combination of earnings preview, segment order and margin forecasts, peer relative valuation, and earnings estimate revisions. HSBC references peers such as GE Vernova and Mitsubishi Heavy for gas turbine orders and demand guidance to assess ENR's position in the Gas Services cycle; at the same time, it adjusts FY26e to FY28e margin assumptions based on margin changes in Grid Technologies and Siemens Gamesa.

Methodology notes

• Valuation methodEV/EBITDA relative valuation

  The target price is derived based on relative valuation multiples.

  HSBC maintains the assumption of a 15% discount to GE Vernova's 2028e EV/EBITDA multiple and raises Siemens Energy's target price to EUR205 due to higher peer multiples and upgraded earnings estimates.

• Earnings forecastSegment order and margin preview

  Orders, revenue, and margins are assessed by segment across Gas Services, Grid Technologies, Transformation of Industry, and Siemens Gamesa.

  The report focuses on Q3 FY26 orders, revenue, profit before special items, and margin, and compares them with Visible Alpha consensus expectations to judge the risk of results coming in above or below expectations.

• Investment ratingHSBC equity rating framework

  The rating band is determined by the upside of the target price relative to the current share price.

  The report discloses that if the target price is more than 20% above the current share price, the stock is typically classified as Buy; this report implies upside of about 34.6%.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Siemens Energy AG equity

  Core covered name

  Strengths

  Gas Services has high-margin recurring revenue, Grid Technologies is supported by electrification and grid investment, and Siemens Gamesa's turnaround improves earnings leverage.

  Weaknesses

  The share price has previously been highly volatile, valuation already reflects part of the growth expectation, and FY26e net profit has been cut due to a higher tax-rate assumption.

  Comparison

  The report references gas turbine orders and demand outlook from GE Vernova and Mitsubishi Heavy; the target-price valuation maintains a 15% discount to GE Vernova's 2028e EV/EBITDA multiple.

  Risks

  Gas turbine order conversion is slower than expected, supply-demand balance deteriorates after 2030, Gamesa's turnaround falls short of expectations, or offshore wind deliveries decline from high levels in 2028-2029.

• GE Vernova

  Key peer and valuation benchmark

  Strengths

  Also benefits from gas power demand and growth in GW commitments.

  Weaknesses

  HSBC rates it Hold, and the report notes its Q2 results missed expectations but still provided cyclical reassurance.

  Comparison

  ENR's target price uses a 15% discount to GE Vernova's 2028e EV/EBITDA multiple.

  Risks

  Changes in peer order momentum may affect the market's view of the cycle position of ENR's gas business.

• Mitsubishi Heavy

  Reference point for gas turbine demand guidance

  Strengths

  Provides a conservative benchmark for global gas turbine demand.

  Weaknesses

  Its May guidance projected a year-on-year decline in 2026 orders and global demand of 70-100GW, below ENR's more optimistic annual demand assumption of 110-120GW.

  Comparison

  ENR and GEV's commentary on GW commitment growth is clearly stronger than MHI's more cautious demand view.

  Risks

  If MHI's more conservative demand view proves closer to reality, ENR's order-cycle expectations may be revised down.

Key data

• RatingBuyHSBC maintains a Buy rating on Siemens Energy AG.
• Target priceEUR205.00The previous target price was EUR190.00.
• Current share priceEUR152.32As of 22 July 2026.
• Implied upside+34.6%The body of the report also describes it as about 35%.
• Market capitalizationEUR131,164m / USD149,677mDisclosed on the market data page.
• 52-week price rangeHigh EUR187.62, low EUR84.40, current EUR152.32Disclosed on the report's market data page.
• FY26e HSBC EPSEUR4.04Previous value EUR4.45, a change of -9.0%.
• FY28e HSBC EPSEUR7.67Previous value EUR7.41, reflecting a medium-term earnings upgrade.
• FY26e EBITDA margin13.9%FY25a was 8.6%, and the report expects a significant margin improvement.
• FY26e FCF equityEUR6,800mThe report believes the strong demand backdrop may support a further upgrade to FCF guidance.

Impact & implications

The investment implication of the report is broadly positive: the share-price pullback reduces Q3 FY26 earnings risk, while the gas turbine cycle, structural demand for transmission equipment, and Gamesa's turnaround together support mid-term earnings expansion. If the company further raises FCF or margin guidance in Q3 or subsequent guidance, it could become a catalyst for share-price re-rating.

Risks

• Q3 FY26 orders or margins come in below consensus expectations, especially in the Gas Services and Grid Technologies segments.
• Gas turbine demand slows after 2027, or supply-demand balance deteriorates in 2030 and beyond.
• The conversion of Slot Reservation Agreements into the formal order backlog is slower than expected.
• Siemens Gamesa's quality issues, offshore wind deliveries, or turnaround progress fall short of expectations.
• Offshore wind deliveries fall from current high levels in 2028-2029, weighing on Gamesa's profit recovery.
• A higher FY26e tax-rate assumption leads to a cut in net profit and may limit short-term earnings performance.

What to watch

• Siemens Energy Q3 FY26 results to be announced on 5 August 2026.
• Whether management further raises FY26 guidance, especially for FCF and margins.
• Whether ENR FY26 total gas power GW commitments reach 90-100GW.
• Whether Gas Services orders decline in the second half as guided, and whether the magnitude of the decline remains manageable.
• Order, pricing, and margin resilience of Grid Technologies in the US and Europe.
• Whether Siemens Gamesa achieves near-breakeven or turns profitable in H2 FY26.