Time to buy Siemens and HelloFresh after big share price moves? Here's what analysts say

Published Thu, Nov 16 20236:51 PM EST

Shares of HelloFresh lost nearly a quarter of their value on Thursday after the German meal-kit delivery firm surprised investors by issuing a profit warning. The company — despite only reiterating its financial targets three weeks ago — blamed the revised guidance on fewer new customers and difficulties at its production facilities. In contrast, Siemens , the German industrial manufacturing giant, posted strong fourth-quarter and full-year results that beat market expectations. Shares of the $125 billion company jumped by more than 5% on the news. How are analysts reacting to HelloFresh? HFG-FF YTD line Jefferies Jefferies analysts noted after HelloFresh's profit warning that the company faced lower North American revenue and higher costs in the fourth quarter due to the delays in increasing production capacity. The company said these were temporary issues that have largely been fixed. Jefferies does not expect them to have a major impact on HelloFresh's 2024 outlook. The investment bank has a price target of 33 euros ($35.60) on the stock, which points to an upside potential of 113% over the next 12 months. Morgan Stanley Morgan Stanley analysts said they expect investors to be surprised by the extent of HelloFresh's forecast downgrade, given that the company reiterated its guidance just last month. The Wall Street Bank said it expects analysts to reduce their 2024 projections for HelloFresh following the news. "We expect consensus to de-risk 2024 forecasts on the back of the news, even with the company pointing to the impact being temporary, given the higher US actives churn and slower ramp in Factor," said the bank's analysts led by Luke Holbrook. They also noted their investment thesis remained unchanged after the profit warning. Morgan Stanley has a price target of 22 euros a share. That represents a 42% upside potential over the next 12 months. Bernstein Analysts at Bernstein said they struggle to understand what changed in the few weeks since HelloFresh reiterated its guidance. They noted factors cited by company management like labor law changes and water supply issues in Arizona were already known, although their exact impact may have shifted. While HelloFresh considers most of the issues temporary, Bernstein analysts believe the business has structural problems that will continue to affect performance in 2024. "While management considered most of the issues to be temporary, they did acknowledge that the US mealkit business is underperforming … which we think is more structural, driven by their challenged business model, weak consumer proposition, high penetration and customer churn, making discount driven growth increasingly harder to come by," said the analysts led by William Woods in a note to clients. The investment bank has an "underperform" rating – equivalent to "sell" at other banks – on the stock with a price target of 16 euros a share. How are analysts reacting to Siemens? SIE-DE YTD line Deutsche Bank The German bank's analysts called the quarter "outstanding" and said the guidance was "encouraging." They highlighted the company's "record-high" order backlog of 111 billion euros, of which 43 billion euros will convert to revenue in fiscal 2024. Deutsche Bank has a "buy" rating on Siemens stock with a 185 euros 12-month price target, giving it a 26% upside from the current share price. UBS UBS analysts led by Supriya Subramanian also described Siemens' outlook as "slightly better than expected" and anticipate "low-single-digit upgrades to consensus estimates." The Swiss investment bank has a price target of 167 euros a share on the stock, which points to 14% upside over the next 12 months. Berenberg Berenberg analysts were also upbeat, stating "there is little to nothing in particular to find fault with" in Siemens' latest earnings release. They expect the results will be "well received" and see Siemens stock as "the most mispriced largecap equity in our coverage." Berenberg's Philip Buller and Philip Modu have a price target of 170 euros a share, which is 16% above the current share price. — CNBC's Michael Bloom contributed to this report.