Alstom

The IR team insisted that the €7.5bn of orders booked in 3Q are mostly “options” contracts. As a result, Alstom will not receive down payments corresponding to €7.5bn, which may be seen as a disappointment. However, these contracts are less risky and more profitable.

Concerning the ramp-up of the Avelia Horizon platform, SNCF has announced that homologation will be postponed to summer 2026 (vs. spring 2026). This will have an impact on cash, but it should be manageable thanks to other developments. This is why they will easily meet the FCF guidance midpoint rather than exceed the upper range of the guidance for the year.  Note that this is only a 3-month delay in terms of cash and therefore should have little financial impact.

Investors might be concerned, and consensus will reduce FCF estimates. This could have a negative impact on the share price over the coming weeks, especially after the recent strong run and as the market was rather expecting a guidance upgrade in 3Q. 

However, we think this could represent a good entry point, as the narrative has not changed. As mentioned above, cash generation is simply being shifted from one quarter to another. In all , no rush to buy the name ahead of the Q3 release on January 20.