Europe France Capital Goods Electrical Equipment 8 July 2008 Results Preview Company Company Alstom Reuters: ALSO.PA Bloomberg: ALO FP Exchange: PAR Ticker: ALSO Hold Price at 8 Jul 2008 (EUR) 70.86 Price Target (EUR) 73.00 52-week range (EUR) 83.55 - 58.69 Q109 sales/orders preview; Key changes Target Price 145.00 to 73.00 È -49.7% adjusting for stock split Martin Wilkie Peter Reilly Price/price relative Research Analyst Research Analyst (+44) 20 754-51956 (+44) 20 754-59835 85
[email protected] [email protected] 75 65 55 Q109 preview; adjusting Target Price to €73 due to stock split 45 Alstom will report Q109 orders and sales on July 16, when we expect group 35 25 orders of €6,221m and group sales of €4,499m. With this note we are also 15 adjusting our Target price to €73 and adjusting our EPS estimates by 50% to 7/05 1/06 7/06 1/07 7/07 1/08 reflect the 2:1 stock split effective from July 7; we have made no underlying Alstom changes to our model. Despite Alstom's attractive growth profile we find the DJ (.STOXXE) (Rebased) Global Markets Research valuation full relative to sector peers and retain our Hold rating. Performance (%) 1m 3m 12m Expect orders to fall YoY due to contract timing; end markets remain strong Absolute -11.3 1.6 10.9 Although announced order trends remained healthy in the quarter (see pages 4 DJ (.STOXXE) -9.5 -12.6 -27.9 and 5), we expect booked orders to fall YoY in Q1, largely driven by the large Stock & option liquidity data €2.1bn SNCF rail contract booked in Q1 last year, as well as the timing of the Market cap (EUR)(m) 20,399.6 booking of the announced €1.3bn Eskom, €1bn Essent, and €1.9bn Saudi power Shares outstanding (m) 288 contracts, all of which we expect to be booked later in the fiscal year.