Citi gives Alstom a Buy rating, but warns of risks

Published 12/09/2024, 21:14
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Investing.com - Citi Research has assigned a high-risk Buy rating to Alstom (EPA: EPA:ALSO) shares, with a price target of €22, compared to the current price of €16.10.

According to the bank, Alstom shares have underperformed recently due to concerns related to the company's short-term debt. However, the company has reassured investors by stating that it has enough liquidity to repay its debt by the end of September 2024.

The report anticipates a 36.6% increase in the share price over the next 90 days, largely due to the repayment of short-term debt and a reaffirmation of forecasts during the November 2024 results.

However, the company faces several risks, such as uncertainty related to cash flow generation, competitive pressures in the rail industry, and integration risks following the acquisition of Bombardier (OTC:BDRBF) (TSX:BBDb) Transport.

The report therefore highlights an opportunity for Alstom's share price to rise in the short term, while accounting for uncertainties related to debt management and acquisition integration.

InvestingPro's models show a fair value of €24.49 for Alstom. This implies a potential increase of 47.2%.

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