Oddo BHF reiterates its "Outperform" recommendation on the stock and leaves its target price unchanged at €26 following the publication yesterday's 2024-25 annual results (to end-March).

Revenue grew 6.6% on a comparable basis to €18.5bn, and the adjusted EBIT margin came in at 6.4% (+70 bp). These figures are broadly in line with expectations, the analyst says.

"FCF reached €502m, well above expectations (consensus at €330m), including €640m for the second half. Net debt stood at €434m at end-March," the analyst highlights in his report.

For FY 2025-26, Alstom expects an order-to-revenue ratio above one, organic revenue growth of between 3% and 5%, and an adjusted operating margin of around 7%.

The consensus forecasts 5.3% revenue growth, 7.3% adjusted EBITA margin and €518m in FCF, Oddo BHF says: in its view, the consensus is likely to lower its estimates at the operating level by around 5%.

We find the 2025/26 guidance disappointing in terms of FCF. Ultimately, the group will not be able to increase its FCF year on year, and 2025/26 will remain a transition year. However, the confirmation of the three-year guidance (FCF > €1.5bn) is reassuring, Oddo BHF concludes.


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