canofpoopBOMBARDIER INC. (BBD.B : TSX : C$3.86) - SELL - 12-MONTH TARGET PRICE:
UNDER REVIEW
Robert Fay
Comment: US Airways announces a split order for Bombardier and Embraer
regional jets
US Airways provided a split order for Bombardier and Embraer with 85 firm
orders and 190 re-confirmable orders/options for each manufacturer.
Bombardier’s net new orders totaled 49 aircraft, with 36 orders
representing a “transfer” of firm orders from GECAS (which is providing
financing for US Airways’ purchase of regional aircraft). While
Bombardier will not increase production of its regional jets, this order
firms up Bombardier’s production through April 2005 and could offset
deferrals by other customers. Both manufacturers are involved in the
committed financing for a “majority of these aircraft” but no details have
been provided. The rise in the Canadian dollar increases concerns about
the profitability of the company’s aerospace operations. We re-iterate
our SELL rating with our target price remaining UNDER REVIEW.