Bombardier Inc. T.BBD.A

Alternate Symbol(s): BDRPF | T.BBD.PR.B | BDRXF | T.BBD.PR.C | T.BBD.PR.D | BOMBF | BDRAF | T.BBD.B | BDRBF

Industrials Aerospace & Defense

Bombardier Inc. is a Canada-based manufacturer of business aircraft with a global network of service centers. The Company is focused on designing, manufacturing and servicing business jets. The Company has a worldwide fleet of more than 5,000 aircraft in service with a variety of multinational corporations, charter and fractional ownership providers, governments and private individuals. It operates aerostructure, assembly and completion facilities in Canada, the United States and Mexico. Its robust customer support network services the Learjet, Challenger and Global families of aircraft, and includes facilities in strategic locations in the United States and Canada, as well as in the United Kingdom, Germany, France, Switzerland, Austria, the United Arab Emirates, Singapore, China and Australia. The Company's jets include Challenger 350, Challenger 3500, Challenger 650, Global 5500, Global 6500, Global 7500 and Global 8000.

TSX:BBD.A - Post by User

Bombardier Inc.

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Comment by Copainon Jun 25, 2017 8:28pm

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Post# 26403318

RE:Bombardier Inc. Stock: Debt is Too Much to Overlook

You're right, debt is too much to overlook.

BBD.B is going to return below 2 dollars.

Synch wrote:
You might think Bombardier can just use their available short-term capital resources (Cash and revolver) of $3.9B to pay off a portion of this debt, but this money will be needed to pay off short-term obligations due to their poor liquidity and inventory turnover. Bombardier may have to halt CapEx spending, which will deteriorate the value of their assets and stop any growth initiates in their pipeline, thus limiting their ability to generate cash flows.

The Company’s FCF guidance seems aggressive given their history of poor budget projections and missing project deadlines. So, what we are left with is a mismanaged company that will have issues paying off debt, if it does pay off its debt it will be left with a depleted asset base.

Bombardier is trading at 18.2x EBITDA compared to the Aerospace & Defense industry median of 11.3x, suggesting investors are optimistic about the Company’s future EBITDA growth. This valuation seems high for a Company that will likely have trouble paying off its debt.

Reference :
https://smallcappower.com/analyst-articles/bombardier-inc-stock-debt/