(Bloomberg) -- In what’s been another year of underperformance for European stocks versus their US peers, a German renewable energy firm is bucking that trend with a rally beating even that of semiconductor-darling Nvidia Corp.
Siemens Energy AG shares are set for a sixth straight week of gains and have now tripled this year, the only stock in Europe’s Stoxx 600 benchmark to top the US chip giant’s 177% advance.
After three years of declines following its 2020 spinoff, the former Siemens AG subsidiary has rallied as it signals that its lucrative gas and electric-grid businesses are helping to provide funds for a turnaround of the struggling Spanish wind-turbine unit, Gamesa.
“The grid side of the business is doing amazingly, benefiting from the expansion of the grid and the electrification trend,” said Bloomberg Intelligence analyst Omid Vaziri. “And the lack of negative surprises on Gamesa has also improved sentiment on the stock,” he added.
Renewable energy shares have also been part of broader gains for the bond-yield-sensitive utilities sector as central banks signal further rate cuts are on the agenda.
Related: Stars Are Aligning for a Renewable Energy Comeback: Taking Stock
To be sure, ahead of fourth-quarter results on Nov. 13, some analysts are cautious that Siemens Energy’s improving fortunes may already be factored into the share price.
“We have some concerns around risk of ‘travel-and-arrive’ into this event,” Citigroup Inc. analysts including Vivek Midha wrote in a note, keeping their rating at neutral.
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