Siemens Energy Sell-Off Is Unwarranted, JPMorgan Says
Oil futures extended their gains Wednesday as the U.S. and Iran continued military strikes and Secretary of State Marco Rubio said Iran isn’t serious about peace talks. The comments came after President Trump said Tuesday the U.S. wasn’t interested in a meeting until Iran was ready to negotiate in a meaningful way.
“This, combined with the opening of new fronts, will likely prompt a wave of speculators to chase prices higher, potentially pushing Brent crude above the triple-digit levels,” said Peter Cardillo of Spartan Capital. WTI for August delivery went off the board at $84.91 a barrel, up 2%. The September contract rose 2.3% to $84.34, and Brent settled up 2% at $91.01 a barrel.
“The market remains supported by elevated geopolitical risk, but any meaningful diplomatic breakthrough could quickly remove part of the current risk premium,” analysts at Kotak Neo said in a note.
GE Vernova raised its full-year free cash flow outlook to between $11.5 billion and $12.5 billion, up from a prior range of $6.5 billion to $7.5 billion, after growing its gas-powered equipment slot reservation agreements to 116 gigawatts from 100 gigawatts during the second quarter. The company said it is on track to reach 125 gigawatts by year end.
Year-to-date free cash flow of about $10 billion was 2.5 times higher than in the same period a year earlier, CEO Scott Strazik said on a call with analysts. “We expect our free cash flow in the first half of the year to be substantially higher than the second half, as many of these slot reservations convert to orders,” CFO Ken Parks said on the same call.
The power and electrification businesses’ strong order growth counterbalanced a slowdown in the wind unit, where orders fell 40% organically and segment revenue dropped 10%. Strazik said the U.S. onshore equipment market remains soft and that the company is still watching how the Trump administration’s Section 232 tariffs would affect wind development. Parks said it remains difficult to forecast when U.S. orders will turn around given the tariff uncertainty and persistent customer permitting delays.
Siemens Energy shares fell as much as 9% before paring losses to 4.8%, as investors questioned whether the slot reservations GE Vernova announced were binding. JPMorgan analysts said the read-across to Siemens Energy was unwarranted because the German group is more focused on confirmed orders.
“Evidently, demand is still very strong and supply is still materially too low versus demand, for now at least,” the JPMorgan analysts wrote. They see demand continuing to outstrip supply through 2028. GE Vernova shares fell 5% in premarket trading.
Iberdrola entered Finland’s power grid market with the acquisition of an 80% stake in grid operator Caruna for roughly €2 billion. Citi analysts said the deal marks a strategic geographical pivot, though they warned the valuation is demanding—Iberdrola is paying double what the assets are worth and 17 times Caruna’s expected 2027 profits to secure €369 million in operating profit by that year.
“Strategically, the acquisition fits the company’s focus on networks but brings a new geography to Iberdrola’s mix, which historically has focused on Spain, the U.K., the U.S., and Brazil—a strategy the market appreciates,” Citi said. RBC Capital Markets analysts noted the deal will shift more of Iberdrola’s business toward stable, regulated grids. Caruna’s network is projected to reach an asset value of roughly €3 billion by 2031, backed by a regulatory framework granting an 8% return on equity through the decade.
Separately, Norway’s Equinor reported a solid operational quarter with a small underlying earnings beat, RBC Capital Markets analyst Biraj Borkhataria wrote. Most divisions reported earnings close to expectations, while cash flow from operations and gearing were better than forecast. The management call later Wednesday was expected to focus on the outlook for the Johan Sverdrup and Johan Castberg fields.