Alstom shares gain on good order progress for H1 By Investing.com

Investing.com — Alstom Shares ( EPA: ) rose on Friday, supported by strong progress in order intake for the first half of the year.

At 9:10 am (1310 GMT), Alstom was trading 4.9 percent higher at €19.54.

This increase in investor sentiment aligns with growing optimism that the company’s consistent execution of its three-year plan will support a sustained re-rating of its stock.

A key catalyst for inventory movement is the company’s strong order flow, which is an encouraging sign of demand in key segments.

Despite broader market concerns earlier this week about the potential impacts of higher corporate tax rates in France, analysts at Citi Research suggest Alstom is relatively insulated from such pressures.

While France accounts for a major portion of Alstom’s total sales, the company’s exposure to taxable profit in the country is considerably lower.

This is because French revenues are skewed towards lower-margin rolling stock as opposed to the higher-margin services Alstom offers in other regions.

Citi analysts noted that France’s contribution to Alstom’s pre-tax profit is likely well below 10% of the group’s total.

This revenue mix, combined with the company’s global diversification and its higher-margin activities outside France, positions Alstom better to face potential challenges from rising domestic tax rates.

“We have updated our model to reflect backorder announcements and other adjustments, including currency, and remain Buys ahead of the first half results in November,” the analysts said.