TD Preview Reminder: TD has a 129$ target and 32 deliveries for Q2
Bombardier:
We forecast revenue of $1.74 billion (cons: $1.82 billion), up 4% y/y, based on 10% delivery growth and 7% Service revenue growth, offset by mix shift towards Challengers. We believe there is increased uncertainty around forecasting deliveries in Q2. We estimate Adjusted EBITDA of $276 million (cons: $291 million), flat y/y, and 50 bps of margin compression due to mix shift and inflation, partially offset by delivery and aftermarket services growth, pricing, and other cost-saving initiatives.
We forecast FCF usage of $256 million (cons: usage of $190 million). Forecast FCF this quarter is subject to the challenges of estimating the impact of ramping-up Global production. Investors should watch the b:b ratio as it remains one of the more uncertain data points that has historically been important for the share price.
We believe investors should not expect a continuation of the strong Q1/24 b:b, but something closer to, or even slightly below 1.0x through the balance of the year.