RBC: BBD remains our top idea Q4 Airlines & Aerospace Preview
Our view:
We keep our estimates unchanged with the exception of AC, ..........................We like the set-up for BBD into 2024; which based on our estimates means that the 2025 (multi-year) guide is also looking increasingly conservative with risk to the upside, in our view.
BBD.B
Q4 estimates unchanged; price target remains at $98; reaffirm Outperform rating.
We are maintaining our Q4/23 EBITDA estimate of $411MM, slightly below consensus of $419MM. Our estimate reflects a seasonally high 57 total deliveries built throughout the year, generating a strong FCF print of $621MM. Our out-year estimates remain above consensus, and we expect BBD to provide solid 2024 guidance, with upside risk to 2025 guidance on solid execution to date, growth in services, and a supportive business jet market. Key focus into the quarter will be on demand, book-to-bill and services growth. Our price remains at $98, and our target multiple is unchanged at 6.5x.
BBD remains our top idea and trades at a 50% discount to peers