Siemens Energy debuted on Monday with 22.01 euros per share and valued the new company at 16 billion euros.
The parent company Siemens was hoping for a valuation of over 21 billion euros
Siemens Energy’s share price recovered by 6% today to trade in green
The shares of Siemens Energy (ETR: ENR1n) rallied 6% today to compensate for yesterday’s losses. The stock opened lower on Monday than expected at its market debut on the Frankfurt Stock Exchange.
Fundamental analysis: A disappointing debut
The German giant Siemens (ETR: SIE) decided to make its energy division independent. Siemens Energy debuted on Monday with 22.01 euros per share and valued the manufacturer of gas turbines and power transmission systems at around 16 billion euros (18.6 billion dollars). The company hoped to achieve a valuation of over 21 billion euros.
“I have repeatedly pointed out that we expect high volatility in the first weeks,” said Ralf Thomas, CFO of Siemens.
“It is not a specific situation for Siemens Energy, it is the same for every spin-off,” he said.
The German monster underwent a comprehensive restructuring process which, due to weak profit margins, led to the spin-off of the Energy Group. Siemens Energy expects its revenues to decline by €1.4 billion to €27.4 billion in 2020, with a recovery of between 2% and 12% expected next year.
The parent company retained a majority stake of 35.1%, which it intends to eventually reduce to 25%. Siemens allegedly does not want to close big deals, but will instead concentrate on smaller deals and invest in research and development.
“Conglomerates can do many things well, but they are only really good at a few things that are important for the future,” said Joe Kaeser, CEO of Siemens AG, in 2018.
Technical analysis: Shares are recovering
The shares were quoted at 22.10 euros before plummeting to a low of 19.21 euros per share in a moment. Today the share price recovered and traded about 6% higher, as the current high is 22.93.
Siemens Energy share price (Reuters)
Ralph Thomas said he expects a fair valuation to be available around mid-October. Until then, Siemens Energy is expected to attract more attention as a new company.
The Siemens Energy share made a disappointing debut on its first day of trading on the Frankfurt Stock Exchange before recovering today and trading in the green zone overall.