(AOF) – Invest Securities has adjusted its price target for Alstom shares from EUR 34.4 to EUR 34.1, while maintaining its buy recommendation. The rail giant’s annual results and Investor Day have reinforced its belief that the difficulties associated with Bombardier are well under control and that the recovery is underway. Thus, today Alstom integrates the list of favorite stocks of the design agency.
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Most important points:
– World leader in rail transport, from trams and metros to TGV;
– Activities of €8.8 billion at the end of the 2020-2021 fiscal year;
– Offer for all railway construction activities: rolling stock for 48% of turnover, signaling for 18%, systems for 16% and services (maintenance, remote control of vehicles, networks, passengers, etc.) for 18%;
– Business model based on the complementarity of geographical areas between Alstom
– France, Italy, Spain, India, Southeast Asia, North Africa and Brazil – and Bombardier Transport – United Kingdom, Germany, Scandinavia, China and North America;
– Open capital, 17.5% owned by Caisse de depot et placement du Québec and 6% by Bouygues, with the 13-member board of directors headed by Henri Poupart-Lafarge, CEO;
– Solid balance sheet with €9.2 billion in equity and €4.5 billion in cash.
– Innovation strategy based on more than 10,000 patents: axes: energy efficiency, electromobility by road, sustainable design and production, autonomous train, data management and multimodality / innovation ecosystems: industrial partnerships, with start-ups through the Aster Fund, with suppliers through the Alliance program and participation in the European Shift2Rail program / intern: intrapreneurship with the I nove you competition,
– Environmental strategy for the decarbonisation of activities: linked to innovation (green locomotives, electromobility by road, ecodesign, etc.) and integrated into the overall strategy with positioning on electric rail solutions and the provision of sustainable mobility solutions and low-carbon/increase in natural capital : 36% renewable electricity, 88% recycled waste, 28% recycled metro materials, 14% reduction of CO2 emissions between 2014 and 2020, etc.;
– Fast departure in hydrogen trains;
– In addition to Bombardier, integration of recent acquisitions – Hylion Hydrogen power, Flertex, Shunter, B&C Transit:
– Good visibility (see order book) worldwide supported by investment plans in rail and green mobility.
– Execution of synergies from the Bombardier merger – €400 million over 5 years – and positive impact on profit in 2023;
– Strong margin differences between Alstom and Bombardier, less profitable;
– Impact of the pandemic: decline of 4% in half-year revenues and 45% in net revenues.
The growth niches of electrical equipment manufacturers
Legrand and Schneider Electric have been able to seize opportunities related to environmental problems. Legrand has focused on innovation and external growth. It recently announced two acquisitions, one in the Netherlands and one in Finland. These two operations allow it to expand its electric vehicle charging solutions and strengthen its positions in promising segments thanks to the increasing importance of green mobility and the fight against climate change. As for Schneider Electric, its positioning, focused on connected equipment, services and electrical efficiency, supports performance. It will continue on this path, confident that all of its markets will accelerate over the next three years.