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Tuesday, December 1, 2020

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  • Siemens Energy debuted at 22.01 euro per share on Monday, valuing the new company at 16 billion euros
  • The parent company, Siemens, hoped for a valuation of over 21 billion euros
  • Siemens Energy stock price recovered 6% today to trade in the green overall

Shares of Siemens Energy (ETR: ENR1n) have rallied 6% today to recover yesterday’s losses. The stock opened lower-than-anticipated on their market debut on the Frankfurt stock exchange on Monday. 

Fundamental analysis: A disappointing debut

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The German giant Siemens (ETR: SIE) decided to make its energy division independent. Siemens Energy debuted at 22.01 euro per share on Monday, valuing the gas turbines and power transmission systems maker at around 16 billion euros ($18.6 billion). The company hoped for a valuation of over 21 billion euros.

“I have repeatedly pointed out that we expect volatility to be high in the first few weeks,” said Ralf Thomas, CFO of Siemens. 

“It’s not a situation-specific to Siemens Energy, it’s the same with every spin-off,” he said. 

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The German behemoth underwent a major restructuring process, which resulted in the spin off of the energy unit due to weak profit margins. Siemens Energy expects sales to fall by 1.4 billion euros to 27.4 billion euros in 2020. A recovery of between 2% and 12% is expected in the next year.

The parent company kept a controlling stake of 35.1%, which it wants to decrease to 25% eventually. Siemens is said not to be looking to do major deals but instead wants to focus on smaller deals and invest in research and development.

“Conglomerates can do a lot of things well, but they’re really very good at only a few of the things that will be important for the future,” Joe Kaeser, the CEO of Siemens AG, said in 2018.

Technical analysis: Shares recover

Shares were listed at 22.10 euros, before plunging to a low of 19.21 euros a share at one moment. Today, the stock price recovered to trade around 6% higher as today’s peak is set at 22.93. 

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Siemens Energy stock price (Reuters)

Ralph Thomas said that he expects a fair valuation to be available around the mid-October. Until then, it is expected that Siemens Energy attracts a higher attention as a new company.


Shares of Siemens Energy made a disappointing debut on their first day of trading on the Frankfurt stock exchange, before recovering today to trade in the green overall. 

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