Citi has resumed coverage of Siemens (ETR: SIEGn ) with a Buy rating and a price target of €245, citing the company's growing leadership in industrial AI and automation.
The firm believes that Siemens' expanded software portfolio "puts it in a leading position to enable agent-based and physical AI in industrial applications."
While Citi acknowledged that economic concerns remain due to tariff-related macroeconomic uncertainty, it emphasized the strength of long-term trends.
"We continue to see strong long-term tailwinds in both automation and electrification," analysts wrote in a note.
The investment bank highlighted the "breadth of Siemens' offering in the software and automation markets" as one of its core strengths.
Citi sees Siemens' €7 billion Digital Industries software portfolio as a major competitive advantage following the recent acquisitions of Altair and Dotmatics.
"We believe Siemens' breadth of software offerings, expertise and installed base of edge devices give it a competitive advantage," the company said.
The ongoing shift towards software and SaaS models should also contribute to higher growth and margin targets in the medium term.
Citi also believes that Siemens should divest its 73 percent stake in Healthineers in its entirety and says a spin-off could be beneficial for both financial and strategic reasons.
"We think Siemens should fully exit Healthineers," the firm wrote, noting that deconsolidation could boost return on capital employed (ROCE) to around 25 percent from 18-19 percent and reduce the net debt to EBITDA ratio to 0.2x from 0.9x by fiscal 2026.
Although Citi lowered its 2026 earnings forecast by about 6% due to weaker expectations in short-cycle markets, the firm maintained its constructive view on Siemens' future.
"AI-driven automation in focus" will remain the main theme, Citi said, and Siemens is well positioned for the next industrial upturn.
