Siemens Energy’s problematic wind turbine division (ENR1n.DE) is unlikely to break even before 2026, analysts at JPMorgan and Deutsche Bank said on Wednesday. They added that recovery of the unit would take longer than expected due to widespread problems.
Challenges in Siemens Energy’s Wind Turbine Division: Forecasts revised downwards
Shares in the Frankfurt-listed company were down 0.79% at 06:53 GMT, two days after the group announced a €2.2 billion ($2.41 billion) charge for Siemens Gamesa due to quality and ramp-up issues.
In a note entitled “Gone with the wind”, Deutsche Bank analyst Gael de-Bray reduced his target price for Siemens Energy from €20 to €18 per share, while maintaining a “hold” recommendation. JPMorgan downgraded the stock from “overweight” to “neutral”.
Siemens Energy : Siemens Gamesa’s challenges spread offshore
Analysts at JPMorgan said that although the problems at Siemens Gamesa were widely known, until now they had been mainly related to the land segment, where Siemens Energy had revealed quality problems with rotor blades and bearings.
“However, the problems of inflation and ramp-up are now starting to affect the Offshore sector, the jewel in the crown, demonstrating that the company’s bargaining power is limited despite its status as the undisputed leader in offshore,” they said.
Siemens Energy said it will disclose more information about the future of Siemens Gamesa, including financial targets beyond 2023, at a financial markets day scheduled for November.