Alten: Q1 13 sales below expectations, initial FY13 guidance invalidated
NEUTRAL vs. BUY, Fair Value EUR30 vs. EUR37 (-2%)
We downgrade Alten to Neutral from Buy, and cut our DCF-derived fair value to EUR30 from EUR37, with a 13-15% reduction in our adj. EPS forecasts (-EUR4) and a higher beta (1.8 vs. 1.6, -EUR3) in order to reflect the less favourable sales and profit momentum. Q1 13 sales were disappointing and initial FY13 guidance (sales up at least 4%, op. margin at 10%+) is invalidated due to a clear lengthening in decision cycles. We deem the share price will react negatively near-term, but at this stage Alten looks to be well armed for keeping utilisation rates and prices at decent levels.
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