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Investing.com -- CFRA Research has downgraded its opinion on shares of Alstom (EPA:ALSO), a French multinational rolling stock manufacturer, to "hold" from "buy,” also cutting the 12-month price target for Alstom ’s shares to €21 from €24.
The revised target price is based on a 17x forward price-to-earnings multiple on fiscal year 2026 earnings per share, which aligns with the company’s 10-year average P/E, according to Lim.
The premium valuation previously applied to Alstom was removed due to what CFRA identified as ongoing execution risks.
These risks include persistent working capital volatility, lingering integration challenges stemming from the Bombardier (OTC:BDRBF) deal, and limited visibility concerning future margin expansion.
Alstom recently made two notable announcements. On May 16, the company disclosed that CEO Henri Poupart-Lafarge will not seek a fourth term and is slated to step down following the General Meeting in 2027.
Separately, on June 4, Alstom secured a GBP 50 million contract with FirstGroup and Eversholt Rail.
This agreement involves the modernization and servicing of five Class 222 trains for Lumo’s new open access route connecting Stirling and London.
While these developments reinforce Alstom’s capacity for execution and plans for leadership continuity, Alan Lim stated that "neither materially shifts the risk-reward profile in an increasingly competitive and capital-intensive transport landscape."
CFRA has maintained its earnings per share estimates for Alstom at €1.21 for fiscal year 2026 and €1.44 for fiscal year 2027.