Post by
NoNameAtAll on Nov 04, 2021 10:29am
Scotiabank target increased from $1.50 to $1.75
Updated Commentary from Scotiabank:
OUR TAKE: Mixed. We have updated our model following yet another FCF beat (last week). Our target increases to C$1.75 from C$1.50 on our improved margin and FCF outlook but we maintain our Sector Perform rating as we remain cautious about 2025 guidance, which is what the market seems to be discounting today. While a lot of credit goes to management for continued good execution, pandemic-driven demand tailwinds are also driving FCF strength this year. Thus, we are mindful that order activity could fade over time as commercial airlines are expecting corporate / premium travel to rebound next year. In addition, we are concerned about rising competition in the medium- and large-cabin segments, where two competitors have already announced five new products (G700 in 2022, G800 in 2023, G400 in 2025, Falcon 6X in 2022, and Falcon 10X in 2025). We continue to believe that BBD will either have to increase capital spending or face margin pressure due to competition while cycle could also potentially turn. Our cautious view on the stock is also warranted by its relative valuation at 11.4x / 9.2x EV/EBITDA on our 2022E / 2023E vs. well-diversified comps (stocks with exposure to bizjet and other sectors) at 10x / 9x (consensus)
Comment by
Truthifest on Nov 04, 2021 11:09am
Lack of vision, IMO, results in playing catch-up. Expect the same in 3 months, when Bomber announces another beat. The whole dynamic playing out is very similar to what happened with MU, then AMD before Bomber. Which is why I invested here.