RE:RE:RE:DeliveriesHi again Juan.
Sorry I was busy this morning, and had to dash out so I shortened my response to you.
I get the concern u have over the P/E being so low for Bombardier, compared to it's pears. But you have to understand why that is so.
Last year till January 2021, when we still had BT on the books, we really couldn't compare the P/E ratio to what we are going to get this year for the stand alone BBA. Because we had so many reasons for low P/E ratio with all the LOSSES.
BT drained Bombardier with so many Legacy projects, with both Inventory and R&D. The money that went into BT was killing us. Therefore it dragged our EPS to negative. Then also until we got rid of the CSeries, the CRJ, and all the other money-losing divisions, we were still saddled with R&D, Inventory, and other expenses. But the kicker was the big Debt they accumulated developing the CSeries ans the G7500. We were also carrying a heavy DEBT because of all these reasons. That debt had a heavy Interest to be paid as well as all the other cash outlay for Bombardier. No positive EPS and a low share price by the end of 2020.
So NOW things are changing. The profit level of BBA is going to start to get better after 2021, and the P/E ratio is going to get get a lot better. In fact it will get to comparable teritory to its pears P/E multiples, by 2022/23.This will be possible if only the current Management can manufacture and deliver airplanes at the clip that they are predicting. So deliveries, higher backlogs, and cost effecient manufacturing of their planes will increase the P/E
The debt has been controlled as you said. The R&D is reduced. The G7500 learning curve has been overcome. So now we will start to have bigger profits. BBA is becoming EFFECIENT. Therefore profits. Once the EPS start to climb the SHARE PRICE will start to climb. Because the manipulation will start to become more obvious to real investors. How??? When real investors ( like Banks, and Institutions) see positive EPS every Quarter over Quarter. Then they start buying the Shares because they are so cheap. So it will be harder, or more obvious for the manipulators to keep the SP down. Once the Banks and Institutions see this positive trend in BBA because of the positive EPS, it will trigger the buying spree for those institutions. So the SP will start to climb and the Bomber's P/E ratio will start to climb.
To me it's simple. Once we get effeciency in BBA and then Profit/+FCF's go up, then the EPS will drive the SP up closer the pears P/E Multiples. This will equate to higher Bombardier P/E ratios as well as a $40 SP. Just kidding on the $40 SP. But depending on effeciency, and how fast they can turn BBA around to get to the higher P/E multiples? The faster, and the higher the SP will get.
IMHO. If they can use this 3 year runnway that they created for themselves with the debt, and the low R&D period ahead, along with greater Service revenues, and higher margins on their products. They are going to be just fine. In fact I believe that they are going to have enough money to put into a new clean sheet designs if necessary. But first they gotta start delivering and getting orders and then manufacturing them for a profit. 859
BBDB859 wrote: Hey Juan.
Although I know that their P/E ratio should be higher. We are now just begining our journey with BBA. We need to see 1 full year statements minimum. We need to see what this company can really do. We need the EPS to increase. It is getting better already. The company is positive on EPS and we are now getting to the place, where we can compare it with our pears. The fact that the share price is being manipulated does help P/E. We now, have to rely on the banks to give us those pears multiple comparisons. The banks have the tools, and time to figure those things out better. That's why/how they give us their price per share yearly predictions. With their calculations they tell the public that the S/P should be this. But 2 things have to happen now.
1. The full year statements to see revenues/deliveries from management.
2. Management to show they can earn Profits on an EPS basis.
HopefulJuan wrote: While it is nice to hear news of deliveries it is similar to the debt in that it is something that is under control and being well managed . One delivery or three up or down will not change anything. Real story imo continues to be the distress level P/E multiple and yes it is far better than it was but it should never have been so low.