Inflation and Supply Shortages To Hit Alstom’s Full-Year Results

Narrow-moat Alstom cautioned investors about the impact of inflation and supply chain shortages on margins and its ability to deliver over the coming financial year. While sales and margins are still expected to grow for the full year, on condition that global economic and supply chain pressures do not intensify, we believe both will disappoint relative to previous expectations. This is another obstacle for a business that is desperately trying to convince the market of its long-term investment case. We maintain our EUR 38 fair value estimate, which is predicated on the lower end of management’s medium-term guidance range. Shares appear attractive should these targets be met without the need for a capital raise.