RBC: Q2 ScorecardCanadian Aerospace Q2 Review (I copy only the parts concerning BBD)
Our view:
In this report we provide the key themes from Q2, score Canadian Aerospace names on their overall performance in the quarter, and provide our updated pecking order within the group.
Key Theme #2:
Supply chain impacting the sector. ………..While BBD noted supply chain improvements, engine delays continue to be a headwind, and the company flagged supply chain related M&A is a possibility with respect to the Ireland-based fuselage business, which it sold to Spirit in 2020.
Key Theme #3: Defense opportunities strong. Key from reporting was the numerous opportunities in Defense. ……... Finally, BBD pointed to modification work in defense aiding margin expansion goals in 2025.
Aerospace Q2 Scorecard
We measure our Aerospace coverage via a Q2 scorecard on several selected metrics. Key takeaways from this scorecard are as follows (see Exhibit 1):
Q2 EBITDA VS Consensus: BBD best; AC worst.
Our assessment here focuses on actual results when put into context of expectations both the day of release and relative to consensus 4 weeks prior, as well as the y/y improvement………….. …BBD significantly surprised the market with results up +15% versus consensus the day before the release and +16% 4-weeks prior, due to higher deliveries (that came in at 39, well ahead of our 31).
Our pecking order. Our Canadian Aerospace pecking order is: BBD #1; EIF #2; CAE #3, CHR #4; and AC #5.