On Wednesday, HSBC renewed its 'light' recommendation on Siemens shares, with a target price of 150 euros, the day after the German industrial group released its new forecasts.

At a meeting with the financial community yesterday, Ralf Thomas, the conglomerate's CFO, acknowledged that the decline in sales of the Digital Industries (DI) division - dedicated to industrial automation and digitization - could be steeper than expected in the current fiscal second quarter.

While HSBC attributes this weakness to weak demand in China and customer destocking, it points out that both factors are unfortunately likely to continue until the end of the fiscal year.

The analyst notes that the vitality of the building and infrastructure technology businesses - Smart Infrastructure (SI) - should certainly help to offset this shortfall, but believes that this disappointing outlook belies any hopes of a future rebound in business.

In this sense, he concludes, the uncertainty surrounding the achievement of Siemens' annual targets should continue to weigh on market sentiment.

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