Morgan Stanley: Siemens Energy - Capacity Conundrum: Less Focus for 2026 but Needs Monitoring, Maintain Overweight
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Morgan Stanley maintains an Overweight rating on Siemens Energy, raising the target price from EUR 130 to EUR 144, with a bull-case scenario of EUR 168. While gas turbine capacity could potentially double by 2030, the firm argues it is premature to call an oversupply scenario. Current 2025 gas turbine orders stand at approximately 88GW, significantly outpacing the current industry supply of 50GW and expected 2028 supply of 75GW.
New gas turbine orders are projected to grow over 15% year-over-year in 2026, driven by robust demand. However, visibility into 2027 order growth remains uncertain. Data centers represent about 25% of global gas turbine orders in 2025, and small to mid-sized turbines face greater mid-term pricing risk as they constitute the primary competitive arena for new capacity additions.
Supply chain bottlenecks, particularly regarding turbine blades and nozzles, limit the pace of capacity expansion and pose challenges for new market entrants. Morgan Stanley estimates that Siemens Energy's 2028 EBITA could exceed market consensus by 6%, and by 26% in a bull-case scenario.
Order growth remains the primary catalyst for the stock through 2026. Siemens Energy trades at an attractive valuation, reflecting a 33% discount to peer GE Vernova on 2028 EV/EBITA multiples. Key upcoming catalysts include GE Vernova's fourth-quarter 2025 results on January 28 and Siemens Energy's first-quarter 2026 earnings on February 12. Morgan Stanley also favors GE Vernova and Doosan with Overweight ratings.