Alstom Shares Rise Due to Strong Progress on H1 Orders

Shares of Alstom experienced an increase on Friday, driven by robust order intake progress for the first half of the year. At 9:10 AM, Alstom’s stock price rose by 4.9% to €19.54.

This rise in investor confidence is in line with growing optimism that the company’s effective execution of its three-year plan will lead to a sustained re-evaluation of its stock value. A significant factor contributing to this stock movement is the company’s solid order flow, indicating strong demand in vital segments.

Despite broader market concerns earlier in the week regarding potential effects from rising corporate tax rates in France, analysts suggest that Alstom is relatively shielded from these pressures. While France accounts for a significant portion of Alstom’s overall sales, the company’s taxable profit exposure in the region is considerably lower. This is primarily because the French revenues are focused on lower-margin rolling stock, unlike the higher-margin services provided in other markets.

Analysts have indicated that France’s contribution to Alstom’s pre-tax profit is likely well under 10% of the group’s total. This revenue structure, coupled with the company’s global diversification and higher-margin operations outside of France, positions Alstom to better withstand the potential challenges from increased domestic tax rates.

The analysts stated, “We have updated our model to reflect order intake announcements and other adjustments including currency, and remain optimistic ahead of the first half results in November.”