Bombardier Inc. T.BBD.A

Desjardins : Target to 99$ (potential for 191$ !!!)

[lb1temporary]

Investor day recap—still plenty of untapped potential

The Desjardins Takeaway

Yesterday, BBD raised its 2025 financial targets in connection with its 2023 virtual
investor day. We are pleased by the updated targets given the stronger-than-expected
FCF, revenue, delivery targets and the absence of a plan to develop a clean-sheet design
before the balance sheet has fully recovered (less capital-intensive, more favourable to
creditors and less risky). We remain bullish and recommend investors revisit the story.

Highlights

BBD now targeting 150 deliveries in 2025. Management’s target assumes aircraft sales
of >US$7b and ~150 deliveries in 2025. This target could be increased again as BBD has
the capacity to flex up to 200 aircraft/year.

2025 adjusted EBITDA margin target decreased to ~18% from ~20%—not a cause
for concern. We do not view the decrease in margin outlook as an overly bearish
indicator given management maintained its aftermarket target, which decreased its mix
contribution to 22% (from 27%) of total 2025 revenue. Looking at the industry, an 18%
adjusted EBITDA margin would still position BBD at the higher end of the spectrum.

FCF of US$900m+ and leverage of 2.0–2.5x a key driver—leverage target likely
conservative. We derive 1.6x, which should drive an investment-grade rating, driving
significant benefits to Bombardier, such as better cost of capital, improved access to
liquidity and opening the company to a larger pool of potential investors.
Lower leverage will provide BBD with optionality for several capital-deployment
opportunities post-2025. (1) Reinvesting in existing operations, (2) launching a new
clean-sheet or derivative aircraft, (3) tuck-in M&A, or (4) shareholder returns.

Valuation

Adjusting our forecast and increasing our target to C$99 (from C$97) to account for
the change in FX rates. Our target is based on an EV/EBITDA multiple of 8x on our 2024
EBITDA forecast of US$1,331m. We have adjusted our exchange rate assumption to C
$1.37/US$1 (from C$1.34/US$1).

Recommendation

Reiterating our bullish stance. The update gave us further confidence in management’s
ability to meet (and potentially surpass) its 2025 targets. We believe the stock could be
worth C$191 in 2025 using a 10x EV/EBITDA multiple if management delivers on these
objectives

[bicente]

Finally... somebody who sees it like I do at $100 / share ...it's kind of a big stretch to get it to $191 in 2 years but we shall see , anything can happen , military can be very profitable ...GLTA  

[BBDB859]

This is precisely, why I'm saying that we do a 3 for 1 forward split, at $120. This takes the preasure off the stock SP, from climbing too quickly, and it gives it an opportunity for Investors to get in at a cheaper price of say $40 again. Just for Investors to get their head around the transformation. We need to face facts here. Everyone that knows this company, has lost money at one time or

[Acuras1]

I'm not a fan of the idea of a forward share split anytime soon.  I don't get the idea of a forward split because imo it just helps promote volatility. The idea of cheap versus expensive stocks determined on share price only is imo what invites further speculation of share price.  When a company's financial performance is the highlight of it's business progress, share

[BBDB859]

$91 is high enough for the time being. This is a nice ball park value, for a year or two. But the $191 is just incredible to even fathom. it pretty important for Investors to keep their excitment in check when they hear those types of numbers.

[DrInvestor]

The reality is that most of us won't be able to hold until it reaches $191. This will be a turbulent ride up with lots of up and down. 

[bicente]

there are many ways to manage an investment and selling some shares while it is climbing is 1 that I would like to be a part of ... you don't have to keep all your shares , well at least I don't plan to keep mine forever ... you can sell some of your shares to another investor who has many more years ahead of them to watch it grow ... when analysts keep raising  their forecasts for a

[MyNameIsNobody]

lb1 - Once again, thanks for posting these amigo.

[Truthifest]

I second that.  Few retail investors can get these reports anywhere else but here, thx to you.  Very helpful to one's due dilly.  

[Form001]

191.00, post a lot about that target.

[Mauserintime945]

Between now and 2025 it should have a rise in value. It will not only rise in 2025 ?