Alstom (ENXTPA:ALO): Valuation Check After French IPCEI Hydrogen Funding Is Pulled

Alstom (ENXTPA:ALO) has just confirmed that French government funding for its IPCEI backed hydrogen projects is being pulled. This has prompted the group to suspend related work while it negotiates alternatives with authorities.

See our latest analysis for Alstom.

The news lands after a strong short term rebound, with a 7 day share price return of 7.7 percent and a 30 day gain of 14.6 percent. However, the 5 year total shareholder return remains sharply negative, suggesting recent momentum is more about shifting risk expectations than a fully repaired long term story.

If this hydrogen setback has you rethinking rail and infrastructure exposure, it could be a good moment to scan other aerospace and defense stocks that might offer different growth drivers and policy tailwinds.

With the shares trading only slightly below analyst targets despite modest growth and lingering strategic risks, is Alstom quietly undervalued after its rebound, or has the market already priced in most of its future recovery potential?

Most Popular Narrative Narrative: 1% Overvalued

With Alstom last closing at €23.93, just above the most popular narrative fair value of €23.72, the story hinges on execution and margin repair.

The analysts have a consensus price target of €23.06 for Alstom based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €33.0, and the most bearish reporting a price target of just €9.0.

Read the complete narrative.

Curious how modest top line growth could still support a steep earnings ramp and a re rated profit multiple, all under a higher discount rate? The full narrative unpacks the revenue path, margin rebuild and earnings bridge that have to click into place to make this valuation stick.

Result: Fair Value of €23.72 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, execution risks around delayed rolling stock deliveries and low-margin legacy contracts could still derail margin recovery and undermine the optimistic price narrative.

Find out about the key risks to this Alstom narrative.

Build Your Own Alstom Narrative

If you see the numbers differently or want to stress test your own assumptions, you can build a custom narrative in minutes: Do it your way.

A great starting point for your Alstom research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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