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Alstom: UBS still a buyer; targets 43 euros.

(CercleFinance.com) - UBS has confirmed its buy rating on the Alstom share following the French rail equipment manufacturer's publication of better-than-expected interim results.

The broker maintains its 12-month target price of 43 euros.

The broker's research reports points out that these accounts, and in particular the improvement in the group's adjusted operating margin, are bringing the group significantly closer to its targets set for 2020. Slightly raising its forecasts, UBS believes that Alstom, which targets a rate of “around 7%” by this date, will yield a margin of 7.2% instead.

Meanwhile, Alstom does not lack upside potential: according to UBS, if the synergies were to surprise positively, its target price could prove to be conservative, it says in a report. In the best case scenario, the merger could generate up to around 10 euros in additional value per share, thanks to synergies, and still around 6 euros more due to the expansion of capitalisation multiples.

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