Siemens Ests & Hold Rec Kept

Siemens AG (SI - Analyst Report) is a German industrial conglomerate with interests in information services, automation and controls, medical equipment, power generation, transportation systems, automotive electronics, lighting, and many other areas. With a focus on electronics and electrical engineering, the company is a major multinational with over 400,000 employees in more than 190 countries.

Siemens reported higher-than-expected revenues for 4Q08 but earnings were affected by substantial costs for transformation programs and a substantial provision related to ongoing settlement negotiations regarding legal and regulatory matters. On a continuing basis, for the full fiscal year, return on capital employed (ROCE) declined to 4.8% from 12.7% a year earlier.

We have maintained our revenue estimates for 2009 and 2010 and earnings are likely to be affected by costs for transformation programs, going forward. We continue to rate shares of SI a Hold, and have a price target of $51.75 over the next six months, based on the company selling at 5.64x our adjusted fiscal 2009 earnings estimate.

Udayan Mukherjee contributed to this report.

Read the full analyst report on SI