SEMHF - Siemens Healthineers: Why I'm 'HOLD'Ing After Q1 2025 (Rating Downgrade)

2025-02-16 11:44:21 ET

Summary

• Siemens Healthineers remains a strong medtech company in 2025, but due to pressured margins and lower growth estimates, I am downgrading my rating to "Hold" with a PT of €53/share.
• Despite recent growth and innovations like photon-counting CT scanners, the company's valuation no longer supports a 15% annualized return at current prices.
• The diagnostics segment shows improvement, but competition and macroeconomic challenges, particularly in China, temper the overall growth outlook.
• I believe in Healthineers' long-term potential, but current market conditions and peer valuations suggest waiting for a better entry point at or below €53/share.

Dear readers/followers,

In my previous work on Siemens Healthineers ( SEMHF ) (SMMNY), I made it clear that I have a position in Healthineers, and in my last article back in November, I added to that position at the bottom when the company traded at below €50/share for the native ticker, the German SHL. You can find that particular article here.

The entire Medtech field has been in a bit of the doldrums for about two years at this point. There are several reasons for this, but large/relevant among these reasons are ongoing Chinese buying patterns (or lack thereof), macroeconomics, and the companies in the field managing some fairly heavy cost headwinds in different ways. My strategy has been as I typically act in such a situation - to buy the "leaders" in the field when I consider them to be undervalued....

For further details see: