50% protection: Siemens Energy with a 30% probability.

50% protection.
Siemens Energy with a 30% probability.

November 11, 2023, 6:49 am

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Price swings in the double-digit percentage range over a short period of time are not unusual for Siemens Energy shares. With capped bonus certificates, investors find very high return opportunities and a safety buffer thanks to the high value fluctuation range.

Due to problems with the wind turbine subsidiary Gamesa, the Siemens Energy share price fell by 37% in June 2023. Subsequently the stock, which on May 30, 2023 was still trading at its annual high of 24.80 euros, slowly but surely approached the 10 euro threshold. After the company announced that it had entered into negotiations with partner banks and the federal government to strengthen Siemens Energy’s balance sheet, the share price plummeted by more than 30% to 6.40 euros on October 26, 2023. The stock then returned to the current level of 9.50 euros.

Despite the quality problems of the wind energy subsidiary, Goldman Sachs experts reiterated their recommendation to buy Siemens Energy shares with a price target of 20.50 euros due to the group’s strong division in the power plant sector electricity and gas.

The idea of ​​investment

For investors who want to invest in the volatile stock of Siemens Energy at the current price level and at the same time want to significantly reduce the price risk of direct equity investment, capped bonus certificates currently offer return opportunities and safety buffers very interesting. With such products, investors can generate double-digit returns over the next 13 months with significantly reduced risk of loss.

Caped bonus certificates give investors the advantage over buying shares directly as they allow for high returns even when share prices are stagnant or declining. In return for the attractive lateral opportunities, certificate investors have to give up the unlimited profit potential of equity investments and the prospect of dividend payments.

How does it work

If by the certificate valuation date the Siemens Energy stock never touches or falls below the barrier of 4.75 euros, the capped bonus certificate will be redeemed on 31 December 2024 at the bonus level of 9.25 euros.

The key data

For the DZ Bank bonus certificate with maximum limit on Siemens Energy stock (ISIN: DE000DJ6D198), the bonus level and maximum limit are 9.25 euros. The limit defines the maximum payment amount of the certificate. The barrier activated until the valuation date, 20 December 2024, is 4.75 euros. With the Siemens Energy share price at 9.50 euros, investors were able to purchase the certificate for 7.33 euros. The certificate can therefore be obtained – in the full interest of investors – at a discount of 22.84% compared to the direct purchase of shares.

The possibility

Since investors can currently purchase the certificate for 7.33 euros, it allows a gross return of 29.60% in 13 months (equal to 23% per year) if the share price never increases by 50% up to 4 .75 euros or less by the valuation date.

The risks

If the Siemens Energy share reaches the barrier of 4.75 euros by the valuation day and the share is quoted below the cap on the valuation day, the certificate will be redeemed at the closing price of the Siemens Energy share determined on evaluation day. If this is set below 7.33 euros, the certified investment will cause a loss.

This article does not constitute a recommendation to buy or sell Siemens Energy shares or investment products based on Siemens Energy shares and we assume no responsibility for the accuracy of the data.