On Thursday, Deutsche Bank adjusted its stock price target for Siemens Energy AG (ENR:GR) (OTC: SMEGF), increasing it to €27.00 from the previous €26.00. The firm has maintained a Buy rating on the stock. The revision comes amid discussions about the potential costs associated with Siemens Energy acquiring a majority stake in the energy business of Siemens India.
The analyst from Deutsche Bank provided insights to counter the recent broker claims that Siemens Energy might need to invest between €3 billion and €7 billion for the stake. According to their analysis, the expected expenditure for Siemens Energy is projected to be only €1 billion, a figure significantly lower than earlier estimates.
The acquisition, however, is not anticipated to occur until 2028. By that time, the analyst projects that Siemens Energy’s net cash position will be approximately €3 billion. This amount is deemed sufficient to self-finance the purchase without compromising the company’s financial stability.
The analyst emphasized the positive outlook by reiterating the Buy rating for Siemens Energy. They believe that the company’s strong balance sheet will enable it to undertake the acquisition while maintaining its financial health.
The update on the stock price target reflects the analyst’s confidence in Siemens Energy’s strategic financial planning and its ability to execute the acquisition in a cost-effective manner. The company’s shares are traded on the Frankfurt Stock Exchange and over-the-counter markets.
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