Industrials

Report by Alumbra Research

Alstom shares fell 27% on 17 April and 36% since being added to Alumbra’s high conviction Active List in January, after the company issued a profit warning and disappointing FY27 free cash flow and EBIT margin guidance. In its 16 January initiation report, Alumbra had flagged that a significant year-on-year increase in unbilled receivables across H1 2026 and H2 2025 could indicate project cost overruns, weighing on future margins and cash generation. This was supported by its review of local subsidiary filings. Alumbra had also questioned consensus expectations for €700m of FY27 FCF, given recent cash flow benefited from €639m of unsustainable items.

Financials

Report by Alumbra Research

The share price plummets nearly 75% after forecasts are slashed. Earlier this year, Alumbra Research had published a report highlighting numerous red flags in CABP's IPO prospectus. Most notably, they found the timing of its IPO to be highly questionable given 1) 26% of FY22 revenue and up to 51% of EBITDA would likely dissipate very soon due to changes in Nigeria’s currency policy and 2) CABP did not present a credible plan on how it was going to replace this lost revenue / EBITDA. Furthermore, CABP’s growth leading up to the IPO had benefitted significantly from volatility in other African currency corridors, which they believed was unsustainable. Other recent successful shorts from Alumbra include Alstom, Cerence and Doximity.

Industrials

Report by Alumbra Research

FCF guidance cut validates Alumbra Research’s concerns - Alumbra initiated coverage on ALO on 2nd May due to €1.7bn of excess working capital liabilities from the Bombardier Transportation acquisition that they believed would represent a significant headwind to the group’s FY24 FCF. Last week, the stock crashed nearly 40% as management warned that FY24 FCF is now expected to be between -€750m and -€500m versus prior guidance for ‘significantly positive’ FCF and consensus expectations for FCF of €300m.