Alstom: SG still a buyer - target up from 35 to 41 euros.
(CercleFinance.com) - Société Générale (SG) analysts approve of the merger between the French railway equipment manufacturer Alstom and its German counterpart Siemens Mobility.
This is a deal that should reinforce the profitable growth profile of the future group. Maintaining its buy rating on the stock, SG has raised its 12-month target price from 35 euros to 41 euros (+17.1%).
SG considers the future Siemens-Alstom as a perfect partnership, which should offer very strong complementarities, both in terms of these groups' product portfolios and regional coverage.
Siemens-Alstom (approximately 15 billion euros in sales) is expected to benefit from an improved competitive position in the face of enterprising emerging players such as the Chinese giant CRRC (sales of almost 30 billion euros). And this is at a time that Europe needs to renew its rail fleet and that there is a high level of demand in emerging markets. In short, the group is expected to increase its market share as well as its operating profitability. In addition, synergies are estimated at 470 million euros p.a. four years after the transaction is finalised.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
This is a deal that should reinforce the profitable growth profile of the future group. Maintaining its buy rating on the stock, SG has raised its 12-month target price from 35 euros to 41 euros (+17.1%).
SG considers the future Siemens-Alstom as a perfect partnership, which should offer very strong complementarities, both in terms of these groups' product portfolios and regional coverage.
Siemens-Alstom (approximately 15 billion euros in sales) is expected to benefit from an improved competitive position in the face of enterprising emerging players such as the Chinese giant CRRC (sales of almost 30 billion euros). And this is at a time that Europe needs to renew its rail fleet and that there is a high level of demand in emerging markets. In short, the group is expected to increase its market share as well as its operating profitability. In addition, synergies are estimated at 470 million euros p.a. four years after the transaction is finalised.
Copyright (c) 2017 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.