News
Alstom · Cash Flow · Profit Warning · Share Plunge
French train maker Alstom's shares plummeted 30% after the company withdrew its €1.5 billion three-year cumulative free cash flow target and projected a €1.5 billion cash outflow for the first half of fiscal 2025/26, marking its second major cash warning since late 2023.
Alstom now expects to achieve positive free cash flow only by the end of fiscal 2026/27. This announcement, following preliminary fiscal 2025/26 results showing an adjusted EBIT margin of approximately 6% (below the 7% guidance) and free cash flow of €330 million (down from €502 million prior year), triggered significant investor concern.
Citi analysts noted the preliminary outlook was worse than anticipated, especially regarding the H1'27 FCF guidance. The market reaction saw Alstom's shares on track for their worst day since October 2023, when a previous cash flow issue caused a 37% stock drop.
Barclays warned that Alstom's credibility is shaken after two major warnings in three years. Despite this, Citi analysts dismissed speculation of a cash call, citing Alstom's experienced management, strong order intake, meaningful liquidity, and access to short-term funding.
Short interest in Alstom remains high, close to 10% according to Markit data compiled by Mediobanca.
