Berenberg has downgraded Siemens Healthineers to Hold from Buy while reducing its price target to €39, down from €54, citing what it describes as "little visibility on earnings revisions turning positive" and a set of overhangs likely to constrain the shares through 2026 and beyond.
The broker noted that Healthineers has lagged the Stoxx 600 in recent years. That underperformance, Berenberg said, stems from a mix of pressures including foreign exchange moves, tariffs, inflationary costs and a weak Chinese market.
At its second-quarter results in May, the company trimmed its adjusted EPS guidance to €2.20-2.30 from a prior range of €2.20-2.40. Management attributed part of the revision to supply-chain cost inflation tied in part to the Middle East conflict, estimating an earnings impact of about €0.05 per share. Following the guidance cut, consensus adjusted EPS estimates for 2025/26 have fallen by roughly 20% since January 1, 2025, according to the broker.
Responding to the changing outlook, Berenberg lowered its own EBIT forecasts for 2026 through 2028 by 6.5% to 8.5%.
The analysts identified two principal overhangs for the stock. First is the protracted spin-off process from parent Siemens AG. In November, Siemens AG said it would transfer 30% of its Healthineers stake to its shareholders but would retain more than 30% immediately afterward, while committing over the longer term to reduce its holding below 20%. A shareholder vote on the plan is scheduled for the first quarter of 2027, creating an extended period of ownership uncertainty.
The second structural drag is the Diagnostics division, which Berenberg flagged as underperforming. Company CFO Jochen Schmitz told Börsen-Zeitung on July 3 that management expects it could take up to 24 months to put in place the conditions necessary for a potential divestment of that business.
Despite the headwinds, Berenberg said it continues to view Healthineers' Imaging and Precision Therapy businesses as fundamentally attractive, citing strong market positions and leadership in technology. Still, the broker warned of intensifying competition: GE HealthCare's Photonova Spectra photon-counting CT scanner, which has received FDA approval and is expected to be launched commercially later this year, could increase competition in the high-end CT segment beginning in 2027.
Valuation-wise, Healthineers' shares trade at about 11 times 2025/26 EV/EBITDA, a discount to med-tech peers. But the analysts noted that cheapness alone is not sufficient rationale to hold the stock: with med-technology share prices tending to move in step with earnings momentum, Berenberg sees few reasons to be a proactive buyer at present. The broker indicated it perceives more downside risk than upside to consensus forecasts until the current headwinds resolve.
Context for investors
Investors weighing exposure to the med-tech and healthcare equipment sectors should factor in the dual dynamics highlighted by Berenberg here: an extended corporate governance and ownership transition at the parent level, and operational weakness within Diagnostics that may take up to two years to address. Both drivers have implications for near-term earnings momentum and relative valuation versus peers.