Siemens Shares Slip 4% Despite Santander Upgrade

Siemens AG shares (ETR: SIE) have pulled back 4.09% through this morning's trading session, currently at €250.10, in a move that defied the typical market response to positive analyst revisions.

The drop came despite Santander upgrading the German industrial conglomerate to Outperform with a price target of €287, suggesting potential upside of nearly 15% from current levels.

The market reaction comes following Siemens Energy's announcement one day prior of a $1 billion investment to expand U.S. manufacturing capabilities. The initiative targets growing demand for power infrastructure driven by the proliferation of data centers and artificial intelligence applications.

The expansion encompasses existing facilities across Alabama, Florida, New York, North Carolina, and Texas, alongside a new switchgear plant in Mississippi. The project is expected to generate over 1,500 skilled jobs domestically.

While the investment underscores Siemens' strategic positioning in high-growth sectors, markets appear focused on near-term capital allocation concerns. Large-scale infrastructure projects carry execution risks and immediate pressure on cash flows, potentially weighing on sentiment despite the long-term strategic rationale. The timing of such a substantial commitment may have prompted profit-taking after the stock's strong performance through early 2025.

The current price movement also reflects lingering caution from previous analyst downgrades. Deutsche Bank downgraded Siemens from Buy to Hold in March 2025, maintaining a €240 price target and citing the stock's 30% year-to-date rally that had outpaced industry peers. RBC Capital Markets followed with a downgrade to Sector Perform from Outperform, noting the sharp rally had limited near-term upside potential. These revisions suggested valuation concerns that may continue to influence market sentiment.

Further complicating the picture, Siemens delivered a disappointing fourth-quarter earnings report in November 2025. The company posted earnings per share of $2.08, missing the consensus estimate of $2.55 by 18.43%. Revenue of $21.43 billion also fell short of the $21.55 billion forecast. The stock dropped 5.33% in pre-market trading following that announcement, indicating operational challenges that may still be weighing on market confidence.

The divergence between Santander's optimistic outlook and the market's reaction highlights the complexity facing Siemens. The €287 price target implies confidence in the company's strategic direction and exposure to secular growth trends in electrification and digitalization. However, markets appear to be weighing this potential against immediate financial pressures and recent execution concerns.