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Siemens: UBS says it deserves better; raises target price.

(CercleFinance.com) - UBS reiterated its positive stance on the German industrial group Siemens' stock this morning.

While confirming its buy rating, analysts have raised their 12-month target price from 131 euros to 150 euros (+14.5%).

Siemens has substantially revamped its scope over recent years, and it's not over: the proof of this lies in the merger of its wind division with Gamesa, by the forthcoming merger between its rail division and Alstom, and even the future IPO of Healthineers, its health division.

In short, for UBS, the margin of industrial sectors (roughly equivalent to the group's adjusted operating margin), which analysts expect will reach 11.6% in 2016/2017, could well rise to 13.4% to 15.2% by 2021. Why? Because Siemens is changing its nature and becoming less of a conglomerate, which is improving its productivity, while limiting its central and infrastructure costs. Finally, new synergies are expected at the group's Power & Gas division.

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