Bombardier Inc. T.BBD.A

Gulfstream Reports Strong Aerospace ( Backlog Growth)

[lb1temporary]

From TD: Flash report

GD Reports Strong Aerospace (Gulfstream) Backlog Growth

Event

General Dynamics (GD) reported Q1/22 results this morning. GD owns business jet OEM Gulfstream which accounts for the majority of its Aerospace segment. The Q1/22 Aerospace segment book-to-bill was impressive at 1.7x.

Impact: SLIGHTLY POSITIVE read-throughs for Bombardier

While Bombardier's share price has declined significantly from 2021 highs, the backdrop for the business jet cycle has shown no real signs of cracking and, in our view, is proving to be stronger than we had anticipated even 12 months ago. Clearly concerns over supply chain challenges, which have not had a material impact on Bombardier to-date, inflation, and more recently, Alstom's request for arbitration over claims relating to its purchase of Bombardier's Transportation operations in 2021, are weighing on the share price. This environment could result in prolonged pressure on Bombardier's trading multiples despite the strong fundamental outlook for the cycle and Bombardier's turnaround initiative. However, we believe news such as that from GD (Gulfstream) this morning should provide support to the stock and reinforce our long-term view of the upside potential in Bombardier's share price.

At the time of its Q4/21 report (no update available at this time), GD was expecting 2024 business aircraft deliveries that imply a CAGR of 13% from 2021. This compares to our 10% CAGR (excl. light jets) estimate for Bombardier through 2024, and the company's last guidance of approximately 5% through 2025. We believe that there is upside to Bombardier's guidance, but view the company's conservative target as a prudent approach to managing investor expectations in the current environment.

Bombardier has demonstrated early success in executing on its turnaround strategy, having exceeded its 2021 guidance. We believe that each successive quarter of delivering on financial targets will draw attention to the significant share price upside should Bombardier remain on-track to achieve its 2022 and 2025 targets. We acknowledge that factors negatively impacting sentiment towards the broader aerospace and defence sector and the recent Alstom development could weigh on Bombardier's valuation in the short-to-medium term, but believe that Bombardier's debt profile and cyclical strength will eventually lead to upside for shareholders.

[bago]

Strange how the TD sees the Alstom development could weigh on the bomber yet this board is more knowledgeble than TD and myself. On the bright side looks like a possitive assessment. Markets have reversed from early gains and bomber couldn't  hold those gains either. 

[Bullvsbear99]

Either way this is good for day trading and to hold for very long time.

[MyNameIsNobody]

Bago - '... yet this board is more knowledgeble(sic) than TD and myself' - Wow... nothing against thinking that a TD analyst might be more knowledgeable but adding ' and myself' is something!... you thinking that you're smarter than everyone here. LE and BeingAnIdiiotFullTime may want to debate the ownership of that 'most knowlegeable of the board' title. Let me know

[bago]

Well if the shoe fits.... The handfull here calling me clueless and not seeing that the Alstom story is a negative and  trying to turn it into a positive and telling me I don't know the history like it's some kind of secret lol. I see none of them has much to say now. You bring zero here and yes compared to you  I'm a hero and you are a zero like I have said  before. Why

[johnney]

That's very well said and the truth!

[MyNameIsNobody]

Bago - 'if the shoe fits'... what shoe? Do you mean that you're appointing yourself the smartest individual on this board? Not saying it couldn't be... just saying it's stupid to even think that when you don't really know anyone here. (Just for the sake of it, it's ok if you think that you're smarter than me or anyone who doesn't think like you but what about

[johnney]

Bombardier is always caught into something strange!!

[djanarchy666]

Who cares about this Alstom nonsense. This issue is inconsequential to Bombardier's bizjet business. Alstom is crying crocodile tears over the purchase of BT, this is why they are going the arbitration route and not lawsuit - that should tell you everything about Alstom's intentions! Arbitration will takes years to resolve. People making this into something bigger than it is. 

[Truthifest]

Ib1temp,thx for posting TD's flash report. They nailed it---company's doing well but overhangs may keep the price down for awhile still. IOW, dead money risk for another year or two.

[johnney]

Let's not compare GD, and by far with Bombardier! This is a crippled one, we know that!

[Bullvsbear99]

Its called due diligence. Comparing Bombardier to its main direct competition to see how and where the market/industry is going is good to keep yourself informed. But then again you dont do DD. Based on your rant, it sounds like you listened to some fool and bought high and sitting in red now. Didn't you? You like to complain but never have any useful post. Oh and you like to whine and reply

[johnney]

This post has been removed in accordance with Community Policy

[johnney]

Go back to the Drawing Board, or join Some fools here, that will have another answer! Stop Barking and go to your carpet now!!