Alstom: Oddo BHF still optimistic on merger

(CercleFinance.com) - Oddo BHF maintains its buy rating on the Alstom share, which yesterday unveiled figures for sales and orders that remain upbeat, even though the proposed merger with Siemens Mobility is waiting for the Commission's decision.

Having confirmed its target price of 49 euros for the share, this represents upside potential of over 40%.

Analysts at Oddo BHF have reviewed the conference call that Alstom organised yesterday, following the publication of its results. Global demand remains bullish and we see no reason for Alstom not to finish the year at the top of its forecasts, they said. In particular as the share of services, which are more recurrent, is beginning to increase in the group's product mix.

What about the proposed merger with Siemens Mobility, which is waiting for the decision (expected by 18 February) of a European Commission that appears somewhat reluctant? As a reminder, Alstom has offered Brussels - as a competitive compensation measure - to divest businesses representing 4% of the combined turnover of the potential Siemens Alstom.

Company boss Henri Poupart-Lafarge did not want to reveal any details of the talks; he said that no plan B has been defined at this stage. He also said that the time has come to conclude the procedure and not to extend deadlines, Oddo BHF reports.

Anyway, analysts remain optimistic, saying that their valuation with Siemens Mobility reaches 49 euros. And even alone, Alstom has cash that it could (partly) return to shareholders.


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