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.

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Bombardier Inc.

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Post by NoNameAtAllon Feb 11, 2023 3:09am

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Post# 35281186

Scotiabank Target ($80 with blue sky value at $120)

Time to Focus on the Big Picture, Not Just FCF

OUR TAKE: Positive. We are not overly surprised by a negative market reaction today, with the stock down ~10% at the time of writing. Q4 was a non-event given BBD had pre-announced results while 2023 FCF guidance, at the low end, was initiated at ~$200M below ~$450M consensus (FactSet). Profit-taking could also be a factor in today’s weakness given the stock’s recent outperformance. However, we are positively surprised by the conservative guidance and also believe that management could take the opportunity to raise 2025 targets at the upcoming investor day on March 23. We think too much focus on FCF conceals BBD’s solid margin expansion and deleveraging efforts. We remain bullish with our Sector Outperform rating while raising our target yet again to C$80 (was C$75) on higher estimates. We continue to see the blue-sky valuation at ~C$120 with further upside risk from even better execution. BBD is currently trading at 6.8x EV/EBITDA on our 2024E, close to its pre-pandemic trough of 6.0x and at a steep discount to U.S. comps at 10.5x. That said, some discount is warranted given BBD is not as diversified as its peers and as it was pre-pandemic.