Contents
4 Sector anatomy
5 Sector valuation
6 Investment summary
6 Uncertainty on the railway equipment market
7 An excellent stock-market performance since the start of 2008
7 Greater caution on the sector. We switch to Sell from Buy on CAF and Faiveley. Ansaldo, preferred stock
8 Reasons to believe that the sector would prove resilent…
8 No contraction in order backlog as yet
8 Business still buoyant in some geographic regions
9 Management still confident
10 … but the situation could become less favourable
10 Potential impact of the recession on the railway equipment sector
12 Stimulus plans: state of play and impact?
14 China: threat after opportunity?
17 Excellent stockmarket performance since early 2008
17 Sharply outperformed in declining market…
18 …and underperformance in market rebound was well contained
19 Stock selection now more cautious
19 Key selection criteria: backlog resilience and extent of Chinese threat
19 CAF and Faiveley appear most at risk, while Ansaldo STS appears best placed
20 Changes to our 2009-2013 sales forecasts
20 Share prices very close to target prices in most cases
22 We downgrade Faiveley and CAF to Sell (from Buy) and remain at Hold on Ansaldo (preferred stock), Delachaux
and Vossloh
Company updates:
25 Ansaldo
27 CAF
29 Delachaux
31 Faiveley
33 Vossloh