FRANKFURT (dpa-AFX) - Siemens Energy shares recovered somewhat further at the start of the week from their record low reached last Thursday. Some analysts see the share price drop as exaggerated, not least in view of the energy technology group's importance for the energy transition.

After a share price jump of almost 17 percent at the start of trading, however, the gains brittled away. In later morning trading, the somewhat firmer Dax was still up 6.8 percent at 8.00 euros.

On Thursday, the share price had plunged by more than 35 percent following news that the company had requested billions in guarantees from the German government. However, Siemens Energy Supervisory Board Chairman Joe Kaeser had stressed in an interview with the newspaper "Die Welt" that the talks with the German government were only about guarantees, not a cash injection.

Analyst Ajay Patel of Goldman Sachs confirmed his "Buy" recommendation for the share this Monday, which means that he expects the potential for returns to remain high at the current price level and in comparison with the other industry colleagues he follows. However, he lowered his price target by around 20 percent to 20.50 euros.

The order intake increases the need for guarantees for long-term projects, Patel explained Siemens Energy's move. For this reason, the board is evaluating various options to strengthen the balance sheet and is holding preliminary talks with shareholders, banking partners and also the German government to secure the necessary level of guarantees for further business growth. The Goldman expert based his capped price target primarily on lowered estimates for Siemens Gamesa's profit margins in light of the power engineering company's recent statements about the problems at its Spanish wind power subsidiary and further cash outflows through 2028.

Volker Stoll, an analyst at Landesbank Baden-Württemberg, had upgraded Siemens Energy shares from "hold" to "buy" the very day after the share price plunged. Admittedly, he also lowered his price target at the same time, namely by a little more than one third to 9.20 euros. However, Stoll is confident for the energy technology group. "Classical energy technology has a solid outlook in the context of the energy turnaround and could enable a return to profitability in 2024," he wrote in his study on Friday. On top of that, the European Commission's plans to take greater account of wind turbine manufacturers' local value creation in tenders could gradually improve long-term earnings conditions for European suppliers, and thus also for Gamesa.

Last but not least, according to him, it seems plausible that Siemens Energy, because of the importance of the group for the energy transition, should receive a state guarantee. However, the necessary state guarantee of up to 15 billion euros, which is being discussed for the processing of orders, has not yet been assured.

Nevertheless, a certain confidence also seems to be spreading on the market: Measured by the current share price, the Siemens Energy share has meanwhile recovered by a quarter since its low of €6.402 on Thursday. Looking at the year to date, however, the stock remains the bottom performer among the 40 Dax stocks, currently down almost 55 percent.

According to index expert Luca Thorißen from the investment bank Stifel Europe, the management does not have to worry about the company remaining in the Dax in December, for the extraordinary index review. According to Thorißen, the share would have to fall considerably further for that to happen. And the regular index review in March is still a few months away./ck/jsl/stk