Deutsche Bank Cuts Siemens (SI) to Sell; Says FY14 Margin Target 'Ambitious'
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Price: $19.92 -3.91%
Rating Summary:
10 Buy, 15 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 20
Rating Summary:
10 Buy, 15 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 20
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(Updated - November 20, 2012 3:35 PM EST)
Siemens AG (NYSE: SI) is ticking lower as Deutsche Bank downgraded the stock from Hold to Sell this afternoon, while easing its price target by €10 to €65.
Deutsche commented, "The headlines of Siemens' latest restructuring plan are impressive but we were less convinced by the detail. We think that the primary issue is the portfolio. Siemens has attractive world-class assets but also has businesses that it would probably not buy today if it did not already own them. We also think the 12% FY14 target is very ambitious. Even if Siemens does achieve 12%, FY13 is likely to be a difficult year with charges and execution concerns exerting downward pressure on the multiple."
The firm is also a little skeptical that Siemens will be able to achieve its amibitious 12 percent margin goal by fiscal 2014. The number assumes a 3 point increase in gross margin at a time when prospects are low, Deutsche noted.
Instead of a portfolio adjustment, Deutsche would like to see Siemens incur a large divestment program including most of Metals Technologies and Infrastructure & Cities which Deutsche sees as "non-core."
Siemens still has to waddle its way through 2013, bearing the burden of €1 billion in charges while enjoying none of the savings.
Siemens is down modestly on the session.
For an analyst ratings summary and ratings history on Siemens click here. For more ratings news on Siemens click here.
Shares of Siemens closed at $100.20 yesterday.
Siemens AG (NYSE: SI) is ticking lower as Deutsche Bank downgraded the stock from Hold to Sell this afternoon, while easing its price target by €10 to €65.
Deutsche commented, "The headlines of Siemens' latest restructuring plan are impressive but we were less convinced by the detail. We think that the primary issue is the portfolio. Siemens has attractive world-class assets but also has businesses that it would probably not buy today if it did not already own them. We also think the 12% FY14 target is very ambitious. Even if Siemens does achieve 12%, FY13 is likely to be a difficult year with charges and execution concerns exerting downward pressure on the multiple."
The firm is also a little skeptical that Siemens will be able to achieve its amibitious 12 percent margin goal by fiscal 2014. The number assumes a 3 point increase in gross margin at a time when prospects are low, Deutsche noted.
Instead of a portfolio adjustment, Deutsche would like to see Siemens incur a large divestment program including most of Metals Technologies and Infrastructure & Cities which Deutsche sees as "non-core."
Siemens still has to waddle its way through 2013, bearing the burden of €1 billion in charges while enjoying none of the savings.
Siemens is down modestly on the session.
For an analyst ratings summary and ratings history on Siemens click here. For more ratings news on Siemens click here.
Shares of Siemens closed at $100.20 yesterday.
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