Siemens Energy (ENR) has delivered one of the most dramatic corporate turnarounds in recent market history, transforming from near-bankruptcy in late 2023 to becoming Europe’s best-performing stock in 2024 with gains exceeding 320%. The rally was driven by a perfect storm of government support, booming energy infrastructure demand, operational improvements, and strategic repositioning at the center of the global energy transition.
The company’s recovery from a crisis low of €6.40 in October 2023 to peaks of €89.52 in June 2025 represents a 750% gain and showcases how quickly market sentiment can shift when fundamental business drivers align with favorable external conditions. More importantly, this wasn’t just a speculative rally – Siemens Energy achieved its first annual profit since its 2020 spinoff, posting €1.335 billion in net income for fiscal 2024 while building a record order backlog of €123 billion.
The crisis that set up the comeback
The foundation for Siemens Energy’s 2024 rally was paradoxically laid during its darkest hour in 2023. The company faced an existential crisis when massive quality issues emerged in its Siemens Gamesa wind turbines, affecting approximately 2,900 units and requiring over €1 billion in fixes. The situation deteriorated rapidly through 2023, culminating in a €4.6 billion loss forecast and forcing the company into talks with the German government for emergency support.
The turning point came on November 14, 2023, when Germany announced a €7.5 billion guarantee program as part of an €11 billion facility. This government backing not only provided financial stability but also signaled official confidence in the company’s turnaround potential. While the guarantee came with restrictions including dividend suspension and management bonus limits, it gave Siemens Energy the breathing room needed to execute its recovery strategy.
Record financial performance drives investor confidence
The 2024 financial results validated the turnaround thesis spectacularly. Siemens Energy achieved record revenue of €34.5 billion (11% growth) and turned a €4.6 billion loss into a €1.335 billion profit – its first annual profit since spinning off from Siemens AG in 2020. The company’s order backlog reached an unprecedented €123 billion, providing multi-year revenue visibility and demonstrating strong demand across all business segments.
Quarterly performance throughout 2024 showed consistent momentum building. Q2 2025 results were particularly impressive, with revenue reaching €10.0 billion (20.7% growth), net income of €501 million, and profit margins hitting 9.1% – the highest since the spinoff. Free cash flow surged to €1.390 billion compared to €483 million in the prior year, reflecting improving operational efficiency and strong demand.
Management’s confidence in the trajectory is evident in their upgraded guidance for 2025: revenue growth of 13-15% (raised from 8-10%) and profit margins of 4-6% (raised from 3-5%). Even more significantly, the company raised its 2028 profit margin target to 10-12% from the previous 8% minimum, suggesting sustainable long-term profitability.
Massive contract wins establish market leadership
Siemens Energy’s rally was fueled by a series of mega-contract wins that established the company as the dominant player in offshore wind grid connections. The €11+ billion in combined contracts from TenneT and Amprion represents the largest offshore grid connection orders in the company’s history and demonstrates its technological leadership in high-voltage direct current (HVDC) transmission.
The TenneT framework agreement alone is worth €7 billion for three German North Sea grid connections with 6 GW total transmission capacity, while the Amprion contract adds another €4+ billion for 4 GW of capacity. These projects feature breakthrough 2 GW bipolar HVDC systems – the world’s first of their kind – doubling transmission capacity from previous 900 MW systems.
Beyond offshore wind, Siemens Energy secured major positions in the emerging green hydrogen market. The 280 MW electrolysis system for EWE’s “Clean Hydrogen Coastline” project will produce 26,000 tons of green hydrogen annually starting in 2027, positioning the company at the forefront of the hydrogen economy. Combined with its Berlin gigafactory for multi-gigawatt electrolyzer manufacturing, Siemens Energy has established clear technology leadership in this rapidly scaling market.
Energy transition creates unprecedented demand tailwinds
The timing of Siemens Energy’s recovery coincided perfectly with a global surge in energy infrastructure investment. Global energy investment reached $3.3 trillion in 2025, with $2.2 trillion directed toward clean energy technologies and infrastructure. The smart grid market alone is projected to grow from $73.8 billion in 2024 to $161.1 billion by 2029 at a 16.9% compound annual growth rate.
Government policies provided crucial support through programs like the US Inflation Reduction Act ($394 billion in energy and climate funding) and the EU’s REPowerEU Plan (€300 billion mobilized funding). These initiatives created sustained demand for Siemens Energy’s core technologies in grid modernization, renewable energy integration, and energy storage.
The emergence of artificial intelligence and data centers as major electricity consumers added another growth driver. Global electricity demand is projected to nearly double by 2050, from 26,000 to 50,000 TWh, requiring massive grid upgrades and new generation capacity. Siemens Energy’s gas turbine business benefited significantly from this trend, with the Gas Services segment posting record orders that more than doubled year-over-year in Q3 2024.
Strategic repositioning addresses wind turbine challenges
Rather than being derailed by the Siemens Gamesa crisis, Siemens Energy used it as an opportunity for strategic restructuring. The company implemented a comprehensive turnaround plan targeting break-even for the wind business by 2026, with clear operational improvements already visible. Sales of revised 4.X turbines resumed in Europe by September 2024, and the 5.X platform is expected to re-enter the market in 2025.
Critically, the company narrowed its strategic focus to Europe and US markets only, improving execution capability and reducing complexity. Quality issues have been addressed systematically, with no new material problems identified since November 2023. The wind business restructuring, combined with leadership changes including a new CEO for Siemens Gamesa, demonstrates management’s commitment to operational excellence.
Meanwhile, Siemens Energy’s other business segments thrived. Grid Technologies revenue grew 34% in fiscal 2024, driven by unprecedented demand for grid modernization and renewable energy integration. The segment benefits from long-term secular trends including aging infrastructure replacement, renewable energy integration challenges, and the need for bidirectional power flows in modern grids.
Institutional validation and analyst momentum
The stock’s rally gained credibility through institutional investor support, most notably Third Point’s significant new position in Q3 2024. Hedge fund manager Dan Loeb cited the wind business issues as “adequately accounted for” and viewed the recovery in gas turbines plus secular growth in grid products as a compelling investment thesis.
Analyst coverage has been overwhelmingly positive, with 29 analysts maintaining a BUY consensus despite the stock’s dramatic gains. Major investment banks including Goldman Sachs, Morgan Stanley, and Deutsche Bank have raised price targets throughout 2024-2025, though the average target of €64.87 suggests the stock has outpaced near-term fundamentals.
Morgan Stanley’s analysis is particularly noteworthy, describing Siemens Energy as being in a “backlog margin discovery phase” with the most profitable margins yet to be realized. The firm forecasts 12% revenue compound annual growth from 2024-2028 compared to 10% consensus, suggesting continued outperformance potential.
Valuation reflects optimism but raises sustainability questions
The magnitude of Siemens Energy’s stock rally has created a valuation puzzle. With a trailing P/E ratio exceeding 300 due to the recent return to profitability, traditional metrics suggest significant overvaluation. However, forward-looking metrics are more reasonable, with the forward P/E around 62 and EV/Sales of 1.64 for 2025 estimates.
The key question is whether the current valuation adequately reflects the company’s transformed business model and market position. With €123 billion in order backlog representing multiple years of revenue visibility, and profit margins expected to expand from 1% currently to 10-12% by 2028, the growth trajectory appears sustainable. The challenge for investors is that much of this positive outlook may already be reflected in the stock price.
Comparing to peers, Siemens Energy trades at a significant premium to competitors like Vestas and Nordex, though its diversified portfolio across wind, gas, and grid technologies provides more stable earnings potential than pure-play wind companies. The company’s market capitalization of approximately €79 billion now exceeds many established industrial giants, reflecting investor confidence in its energy transition positioning.
Key risks and catalysts ahead
Despite the remarkable turnaround, several risks could impact future performance. The wind business turnaround remains in progress, with break-even not expected until 2026. Execution risks in this segment could derail the recovery narrative. Additionally, potential U.S. tariffs could impact margins by high double-digit millions, according to management guidance.
The high current valuation limits upside potential and increases downside risk if the company fails to meet elevated expectations. With most analysts’ price targets below current levels, the stock appears to have outpaced near-term fundamentals despite strong business performance.
However, several positive catalysts remain. The company’s €1.2 billion investment in Grid Technologies over six years, including plans to hire 10,000+ new employees globally, demonstrates commitment to capitalizing on market opportunities. The ongoing energy transition, accelerating grid modernization needs, and emerging hydrogen economy provide sustained long-term growth drivers.
Conclusion
Siemens Energy’s transformation from crisis to market leadership represents one of the most remarkable corporate turnarounds in recent history. The company successfully navigated an existential crisis, secured government support, and repositioned itself at the center of the global energy transition. Record financial performance, massive contract wins, and strong market positioning validate the recovery thesis.
However, the stock’s dramatic appreciation has created valuation challenges, with current prices reflecting significant optimism about future execution. While the fundamental business transformation appears sustainable, investors should be mindful that much of the positive outlook may already be embedded in the share price. The company’s success in meeting elevated expectations, particularly regarding wind business turnaround and margin expansion targets, will determine whether this remarkable rally can continue or if a period of consolidation lies ahead.
Disclaimer: This content is for general information and educational purposes only and does not constitute financial advice. All investments carry risk, and past performance does not guarantee future results. Before making any investment decisions, you should conduct your own research and consider seeking advice from a qualified financial professional who can assess your individual circumstances.