Sunday, October 1

Distrust in Siemens Gamesa cancels its roadmap

Siemens Gamesa stars in the last week of the year of operational announcements such as the signing of wind turbine maintenance contracts with Iberdrola, o de supply to Indian developer Ayana Renewable Power Six Private, but his movements still do not convince a market that distrusts his trajectory.

The renewable energy company has seen its price reduced by 9.9 percent in the last month, and extends those losses to 37.78 percent so far in 2021, a very negative year for the value. It has also been for the renewable energy sector.

In addition, analysts maintain a distant position regarding the company, as shown by the fact that 15 of the 26 consensus analysts maintain a neutral recommendation on Siemens Gamesa, which also sees seven of them advocate selling their securities, while only four experts consider it a good investment at the moment.

The target price of the share at 12 months from now stands at 22.85 euros, which would imply a slight improvement of 8 percent compared to its current price of around 21.2 euros.

India deal falls short

Siemens Gamesa announced in a statement sent on monday to National Securities Market Commission (CNMV) signing an order with the Indian forwarder Ayana Renewable Power Six Private to supply 84 wind turbines, in a project that will have a total capacity of 302 megawatts.

According to the company’s statement, the start-up of the project is scheduled for 2023, in addition to two orders closed in July 2021 for the platform. Siemens Games 3.X, specifically adapted to the Indian market and that the Spanish listed company considers will “play a key role” in promoting the country’s energy transition.

With this third order, Siemens Gamesa supplies a total capacity of 925 megawatts in India, where the company has installed more than seven gigawatts of power since 2009.

From Renta 4 they consider that the news has a positive bias “inasmuch as it reinforces commercial activity and positioning in an important market for the company”, but they point out that “the contract represents approximately 0.6 percent of the order book current “, and indicate that Siemens “It has not communicated that the agreement includes a maintenance contract.”

With these nuances, the bank chooses to maintain its recommendation to underweight the shares of the company, to which it assigns a very low price target of 17.52 euros.

Bankinter has had a similar reaction to the news, from where it maintains the recommendation to sell some securities valued at 19.20 euros, emphasizing that “the outlook for 2022 remains weak, with a prospect of lower income due to project delays and bottlenecks. “

The market remains unmoved by the good news

Just one day after the order was announced in India, Siemens Gamesa has made official the signing of contracts for the maintenance of wind turbines totaling almost two gigawatts in 69 Iberdrola wind farms in Spain and Portugal.

With these new maintenance service contracts, totaling 1,928 megawatts in a period of three to five years, Siemens Gamesa is consolidated as the main provider of operation and maintenance services for Iberdrola in the peninsula.

Not even the closing of this operation, on the other hand, has helped the company raise its head on the stock market during the day on Tuesday, where it has registered falls of 1.31 percent in the intraday chart, despite the announcement.

JP Morgan also lowers its forecast for Siemens Gamesa

Within the accumulation of bad forecasts made for Siemens Gamesa, JP Morgan has been one of the entities that has lowered its estimate to the company’s target price. Previously, it placed it at 22.5 euros as of June 2023, and now it estimates it at 22 euros, slightly below the average consensus price.

“We expect net debt to rise to around € 2 billion in 2023, compared to € 200 million last year, driven by the reversal of working capital, the outflow of provisions, a high investment of capital goods, and lower benefits “, says the report of the financial institution.

Its target price for June 2023 falls to 22 euros, the report also indicates, because it reduces its cash flow estimates, leading it to maintain a neutral recommendation on a company that still does not convince the market.