FRANKFURT (Reuters) -Shares in Siemens Energy recovered some losses on Tuesday after Goldman Sachs (NYSE:GS) analysts kept a "buy" rating on the stock and said the massive sell-off following the disclosure of problems at its wind turbine division was overblown.
The company's shares were up 2.3% at 1026 GMT. They had fallen more than 37% on Friday after the company withdrew its 2023 profit outlook, citing failure rates at its newer onshore wind turbine models that will cost more than 1 billion euros ($1.1 billion) to fix.
"We remain Buy-rated as we believe there has been an excessive negative market reaction over the past several days which leaves Siemens Energy shares deeply discounted," Goldman Sachs analysts wrote.
"Siemens Energy is deeply discounted, in our view, and does not reflect the potential upside that renewables and, over time, hydrogen present," they said, setting a price target of 25.9 euros per share, implying 77% share price upside.
Goldman Sachs said that they estimate 1.5 billion euros in costs related to the communicated problems, less than the 2 billion Jefferies estimate a day earlier.
($1 = 0.9146 euros)