What a dissapointing stock performance.Just before the Farnborough show, the SP closed at $5.40 and everyone was expected it to climb to $6+ if there were good sales of A220, Bombardiers CRJs and business jets at the show. Needless to say that as usual Bombardier failed miserably selling only 4 CRJ 900 contrary to its main rival, Embraer, selling over 200 planes.
Nedless to say that the SP took a dive following the show dropping some 12 or 13% regardless of most analysts adjusting their target near $6.
Then investors started dreaming about great Q2 results with the hope that the SP would climb back to its pre-Farnboroug levels. Q2 results might not be considered outstanding but nonetheless they were very good, beating most analysts expectations.
On Tuesday this week the SP closed at $4.90 but took a beating on Wednesday to close at $4.75. On Thursday after reaching $5.03 is started to drop and closed at $4.91, a net gain of $0.01 over Tuesday pre-Q2 results. Regardless of very good Q2 results, all we got out of this was one additional penny.
Why is that? I really believe that Bombardier is a long shot away for gaining back the confidence of investors after the dissapointment of Fareborough. Many are still bitter with Bombardier giving away 50% of the CSeries to Aitbus with the overblown promess that they would have huge sales at Farnborough which we know did not happen.
Bombardier's own sale performance at Farnboroug sucks. Only 4 planes sold at a 40% discount to a third world country. I guess we should not be surprised because Boombardier never perform at these airshows. Contrary to other manufacturer closing sales at these shows to get world attention, they act as if it is totally unimportant. Their marketting strategy is extremely weak compared to their competition.
The bottom line is that it will take many finacial quarter results similar to Q2 and huge sales before this company gains back the confidence of investors.