Siemens share price analysis ahead of earnings: buy or sell?

Siemens share price will be in the spotlight this week as the second-biggest company in Germany publishes its financial results. SIE stock was trading at €220 on Tuesday, where it has remained at in the past few weeks. It is about 35% above the lowest point in April.

Siemens earnings ahead

The main catalyst for the Siemens stock price will be the upcoming earnings, which will provide more information about its growth.

The most recent second-quarter earnings showed that its orders jumped by 9% to €216 billion. This growth led to a 6% increase in revenue to €19.8 billion, driven in part by its mobility and smart infrastructure businesses

Siemens net income rose by 33%, while its earnings per share jumped by 33% to €7.86.

Analysts expect the upcoming results to show that Siemens orders continued rising in the second quarter. However, there is a risk that growth will not be as strong as expected due to Donald Trump’s trade war.

The average estimate is that its industrial business orders will be €20.74 billion, higher than the €19 billion it made in the same period last year.

Consequently, the company’s revenue is expected to be €18.66 billion, higher than last year’s €18.34 billion. Its smart infrastructure, which is benefiting from the AI tailwinds, is expected to bring in €5.68 billion, up from €5.45 billion last year.

The mobility and Siemens Healthineers revenue are expected to have some modest growth, while the digital industries revenue will drop by 8.6% to €4.39 billion.

Altera and Dotmatics buyouts

The upcoming numbers will be much bigger than estimates because they will include the results of its Altair buyout. It paid $10 billion for the company as it seeks to become a big player in industrial artificial intelligence (AI).

Altair makes software for the software simulation and analysis markets. It helped Siemens expand its services in the mechanical and electromagnetic simulation, high-performance computing, data science, and AI. in a statement, the Siemens CEO said:

“Adding Altair’s groundbreaking innovations to the Siemens Xcelerator platform will create the world’s most complete AI-powered design, engineering and simulation portfolio.”

Siemens also recently announced the buyout of Dotmatics in a $5.1 billion deal. This is an important buyout that expands its business in the Life Sciences industry. The company will generate over $300 million in revenue this year and is already profitable.