Citi gives Alstom a Buy rating, but warns of risks

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. ⚠️Take advantage of INVESTINGPRO+ to find the best investment opportunities on the markets in France and elsewhere.⚠️ ▶ Click here to take advantage of the 1-year Pro+ subscription ▶Click here to take advantage of the 2-year Pro+ subscription

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%. Discover InvestingPro: Your Ally for Winning Investments

InvestingPro offers you a range of powerful tools to maximize your investments and help you make informed decisions in the financial markets. Join our investor community and gain a competitive edge with our exclusive features: ProPicks: AI-Based Investment Strategies

With ProPicks, access sophisticated, AI-based investment strategies that consistently outperform market indices. Benefit from stock recommendations and optimized portfolios to maximize your returns. Screener Pro: Find High-Potential Stocks

Our Screener Pro is an advanced tool that allows you to filter and find the most promising stocks according to your specific criteria. Whether you are looking for high-growth stocks, high dividends, or undervalued opportunities, Screener Pro helps you identify the best opportunities in the market. Access Top Investors’ Portfolios

Discover the portfolios of top investors and get inspired by their choices to build your own investment strategy. Analyze the experts' positions and movements to optimize your decisions and increase your chances of success. Explore Global Stock Financial Data

InvestingPro gives you access to a comprehensive and up-to-date database of global stocks. Explore detailed financial data, analyze past performances, and project future trends to make informed decisions.

Don't miss the opportunity to transform the way you invest. Subscribe to InvestingPro today and take control of your financial future with cutting-edge tools at your fingertips.

InvestingPro – Invest like a Pro! ▶ Click here to take advantage of the 1-year Pro+ subscription ▶Click here to take advantage of the 2-year Pro+ subscription

Source: Investing.com