Bombardier Inc. T.BBD.B

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

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. > TD: Slightly Positive

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Comment by BBDB859on Jul 26, 2024 8:51am

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Post# 36149459

RE:TD: Slightly Positive

Agree with TD's Belfast analysis.

Management is monitoring the Spirit AeroSystems Belfast situation and suggested that Bombardier could be a potential buyer if deemed prudent from a financial, risk, and supply chain perspective. Our preliminary view is that the purchase could be a net positive given the limited expected cost, Bombardier's financial resources, experience with the asset, and risk reducing implications.

Tempo1 wrote: Q2/24; HEADING FOR SAME STRONG 2024 DESPITE THE MOVING PARTS

THE TD COWEN INSIGHT Bombardier reported Q2/24 Adjusted EBITDA of $335 million (TD/consensus: $276/$294 million). Stronger-than-forecast results across the board (deliveries, revenue, Adjusted EBITDA, FCF), a portion due to a pull-forward of deliveries, combined with strong order activity and attractive valuation suggests to us that investors should take advantage of yesterday's negative share price reaction.

Impact: SLIGHTLY POSITIVE

We are maintaining our BUY recommendation and C$129 target. Our unchanged target reflects the shift forward of our valuation-period by one quarter and slightly higher forecast adjusted EBITDA offset by updated FX assumptions. Our updated adjusted EBITDA estimates primarily reflect the carry forward of a portion of the stronger-than-forecast Q2/24 results.

Bombardier reported a good quarter that included adjusted EBITDA, deliveries, and FCF that was stronger-than-forecast and consensus. B:B was 1.0x despite a very strong delivery quarter. The company pulled forward what we believe was a handful of deliveries to Q2/24 from Q3/24, although we believe results would still have been stronger than forecast after adjusting for this impact. Adjusted EBITDA margin was lower-than-forecast and declined 120 bps y/y which we believe was due to delivery mix and a reduced relative contribution from aftermarket services. The 1.0x b:b ratio against 34% delivery growth is impressive and suggests that the demand environment remains healthy. FCF usage is expected to follow historical trends and reverse in the H2/24 as the investments in inventory subside and deliveries improve.

There was no change to management's outlook. 2024 guidance was re-iterated and continues to imply strong revenue and earnings growth, significantly positive FCF that reflects investments in ramping-up Global production and declining financial leverage. Management is monitoring the Spirit AeroSystems Belfast situation and suggested that Bombardier could be a potential buyer if deemed prudent from a financial, risk, and supply chain perspective. Our preliminary view is that the purchase could be a net positive given the limited expected cost, Bombardier's financial resources, experience with the asset, and risk reducing implications.