Citi gives Alstom a Buy rating, but warns of risks

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.

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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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This article first appeared in Investing.com