RE:For the sake of argument......Ultimately, Bombardier will trade based on earnings. With 2.2 billion shares outstanding, and likely another 200 million from the Caisse in the next year (they have share options to buy these at approximately $2.20), Bombardier will have approximately 2.4 billion shares outstanding. To get to $7/share they'll have to make approximately $0.50/share, or $1.2 billion dollars. Bombardier have a stated goal of $1 billion in free cash flow in 2020 so $7/share is possible but more like $6/share.
To hit $20/share a few things would have to happen - they'd need to spin off the Rail division and their real estate holdings to raise cash, and buy back shares and/or the CSeries program from government. Ultimately, significant share buy-backs at a reasonable cost is not their priority in the next 5 years. On the other hand, if the C Series is wildly successful and Bombardier has the cash flow to buy back Quebec's and the Fed's shares (it sounds like the Fed investment will now move forward), we could see $20/share in 10 years. But a lot of things would have to go well including a substantial recovery in the Business Aircraft division.
Predicting the share price in the short term is a fool's game but I see $2.50 at year end, $3.50 next year, and $5-6 at the end of the decade. That's a pretty nice return.
Cjrubber wrote: With the current share structure and shares outstanding can BBD.B hit $7 in the next say 5years? Can it get to $20? I am making the assumption of a lot more orders to come and also I believe one way or another the 500s will be made. I'm trying to compare to other manufacturers like Embraer. I just don't quite have the math down well enough. Let's also assume that bombardier doesn't have any major stuff ups in the next ten years