Siemens AG ADRSI

Morningstar Rating

Stock Research and Analysis

by Daniel Holland

Siemens makes its mark as the technology innovator within its markets, providing customers with solutions that few other firms can offer. Much of Siemens' future success depends on not only being able to keep its technological lead, but also effectively Read more

Bulls Say

Demand for infrastructure in developing countries and developed nations will be high during the next five years, which should lead to increased demand for Siemens' products.

Siemens is the number-one provider of offshore wind turbines and the only major company to offer deep-sea wind turbine solutions.

Although costly, the recent round of layoffs should help improve long-term operating margins and keep Siemens competitive with General Electric GE. Read more

Bears Say

In each of the last two years, Siemens has produced multibillion euro charges, which destroyed much of the meaningful progress the firm built over time.

In the spring of 2009, Siemens announced that it would shift its engineering focus in health care and re-engineer existing technologies to reduce cost. This moves Siemens away from its high-end strength and may cost the company long-term profit margin potential.

Despite many attempts to restructure the business portfolio of Siemens, the company has yet to get costs under control and return value to shareholders.

Offshore wind may be the future of the industry, but it will likely be a black hole of losses in the near term. Read more

Strategy

CEO Peter Loescher has focused his early efforts on shedding low-margin and unprofitable businesses and focusing on core segments where Siemens' strength in innovation will allow for better differentiation Read more

Management

Like all German companies, Siemens has imposed strict oversight on management. As required by German law, Siemens has a two-tier corporate-governance structure consisting of a managing board and a supervisory board that oversees the managing board. Read more

Profile

Siemens is a diversified global manufacturer operating in three sectors; industry, energy, and health care. About 54% of revenue comes from the industrial segment, which Read more

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