Alstom Slashes Margin Guidance to ~1%, Triggers JPM and Citi Downgrades
ALSMY is trading near its 52-week low of $1.17 (1.3% above the low) on elevated volume (4.3× avg).
Summary
Alstom cut its fiscal-year adjusted EBIT margin guidance to about 1% from roughly 6.5% after technical problems with the Coradia Max regional train platform delayed production in the first half. It also lowered its car production target to about 4,000 from 4,400-4,500 and now expects free cash flow of negative €1.5B versus prior guidance for a positive figure. The H1 hit to adjusted EBIT was about €1B, mainly on Coradia Max projects — far larger than the roughly €190M charge taken in last year's second half. J.P. Morgan cut the stock to Neutral from Overweight and slashed its price target to €15.60 from €28; Citi went to Neutral/High Risk from Buy with a €14 target, saying the update leaves as many questions as answers. JPM expects free cash flow recovery to slip at least 12 months, forecasting a €106M outflow in FY2028 before an inflow of €918M in FY2029. Shares fell about 5% in Paris and sit near a 52-week low.
At the time of this announcement, ALSMY was trading at $1.19 on OTC in the Energy & Transportation sector, with a market capitalization of approximately $6B. The 52-week trading range was $1.17 to $3.51. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Seeking Alpha.