(News Bulletin 247) – Siemens Energy gains more than 317% in Frankfurt over the whole of 2024, which marks the largest increase in the Stoxx Europe 600. The company has recovered after suffering in 2023.

With only two sessions remaining this year (and again, the one on December 31 will be shortened), which groups will have the best performances within the major global indices over the whole of 2024?

On the CAC 40, the suspense is still in place. Accor (+35.1% over the whole of 2024) is only a small step ahead of Schneider Electric (+32.6%) and Safran (+32.3%).

In all cases, the winner will show a very modest increase compared to the jumps of certain large European capitalizations. In London, for example, the engine manufacturer Rolls Royce takes more than 90% for the whole of 2024, and the Natwest bank more than 80%.

On the Stoxx Europe 600, a large pan-European index, we can bet, however, that no one will dislodge Siemens Energy and its incredible growth of more than 317% between now and December 31.

From “zero to hero”

Siemens Energy embodies a great story of stock market revenge. If the stock therefore increases by more than 317% in 2024, its action suffered in 2023, with a fall of more than 30%. The action notably suffered a plunge of 37.34% on the single session of June 23, 2023. The former energy branch of the German conglomerate Siemens (which still holds 17% of capital) then abandoned its annual profitability objective at following failures encountered by its renewable energy subsidiary, Siemens Gamesa, on wind turbine components.

The company had experienced the heaviest fall in its young stock market history, Siemens Energy having been listed in September 2020 on the Frankfurt Stock Exchange.

In November 2023, the German state even came to the company’s aid by providing it with more than 7 billion euros in bank guarantees.

Since then, “the share price has increased sevenfold as investors bet that wind power problems would not require a dilutive recapitalization”, while taking “more interest in the company’s activities”. “company in the field of gas turbines and power grids, which benefit from the increase in electricity demand”, writes Bloomberg in an editorial. The agency mentions an action that went from “zero to hero” on the market.

Still potential?

The company’s results have recovered at high speed. Over its entire 2023-2024 financial year ended last September, Siemens Energy saw its orders jump by more than 40%, its revenues increasing by 16.6%. , while its losses were divided by approximately three. The company has indicated that it wants to return to balance in the current financial year and is targeting a pre-tax cash flow of more than one billion euros. Incidentally, the group had raised its profit margin objective, counting on a rate of between 10% and 12% in 2028, compared to more than 8% previously. The stock rose 19% on the day of these announcements.

Note that GE Vernova, Siemens Energy’s most direct comparable, is also having a good year on the stock market. Introduced at the beginning of spring on Wall Street, this American company also produces gas turbines and turbines for wind turbines. Resulting from a split from General Electric, GE Vernova has seen its share price jump by more than 150% this year. It also trades on more generous multiples than Siemens Energy, with a “P/E” (a price to earnings per share ratio) of 105 compared to 37.6 for the German group.

“Gamesa’s turnaround is well underway and we believe Siemens Energy is well placed to strengthen its results in the medium term, with a valuation gap compared to its closest peer, GE Vernova, which highlights potential for ‘rerating’ (improvement in stock market multiples, Editor’s note) more significant”, HSBC noted at the beginning of the month.