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Bullboard - Stock Discussion Forum Bombardier Inc. T.BBD.A

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

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... see more

TSX:BBD.A - Post Discussion

Bombardier Inc. > desjardins a couple of days ago --- FWIW -- Atarget $ 82
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Post by bicente on Jan 19, 2023 8:50am

desjardins a couple of days ago --- FWIW -- Atarget $ 82

Bombardier Inc. Benoit Poirier, CFA • (514) 281-8653 • benoit.poirier@desjardins.com Michael Kypreos, Associate • (514) 985-3498 • michael.kypreos@desjardins.com Rating: Buy, Risk: Above-average, Target: C$82.00 BBD.B C$59.40, TSX Bombardier releases preliminary FY22 results—

 

hits deliveries out of the park! The Desjardins Takeaway: Positive

 

This morning, BBD unveiled its preliminary FY22 results. We calculate 4Q adjusted EBIT of US$219m (8.3% margin), above consensus of US$166m and our forecast of US$158m. Adjusted EBITDA was US $364m (13.7% margin), above consensus of US$309m and our forecast of US$315m. Total revenue came in at US$2,642m, above consensus of US$2,307m and our forecast of US$2,337m. BBD delivered an impressive 49 business jets in 4Q (we had expected 46 deliveries vs consensus of 47). The business jet backlog ended 4Q at US$14.8b, down sequentially from US$15.0b. Full-year book-tobill was 1.4x, and we estimate this implies a book-to-bill of -0.2x in 4Q. In our view, this is not a sign of cooling demand but rather a factor of the inherent seasonality of the bizjet delivery schedule (delivered 40% of FY22 planes in 4Q). Management stated last quarter that BBD is currently reaching a cruising altitude of a ~1.0x book-to-bill ratio and that it is taking a prudent approach and planning for 1.0x in 2023, which would preserve the company’s US$14.8b backlog as a margin of safety in the event of a downturn (represents ~24 months of production). More importantly, 4Q FCF (investors’ main focus) of US$169m was higher than consensus of US$119m (we had expected US$162m), driven by the stronger-than-expected deliveries in the quarter. Given the 4Q EBITDA and FCF beat, cash on hand of ~US$1.3b and the US$200m of debt paid down in 4Q (November), we estimate that adjusted net debt/TTM EBITDA ended the year at ~5.0x, or ~4.6x if we include the US$386m of restricted cash from Alstom (below our estimate of ~5.3x). The Moody’s July upgrade report for BBD stated that a financial leverage ratio below 6.0x (using gross debt instead of net debt) and sustainable FCF could lead to an additional rating upgrade. Using this method of calculation, we estimate BBD ended the year at ~6.3x—on the path to a rating upgrade in 1Q23 (BBD would experience 50–75bps in interest expense savings for each rating upgrade). BBD also announced that it has launched a new senior notes offering of US$500m due 2029 (terms not disclosed, likely below 7.5%). BBD intends to use the proceeds, together with cash on hand, to fund the redemption of all of its outstanding 7.5% senior notes due 2024, of which there is US$396m outstanding, and to finance the purchase of up to US$104m of its outstanding 7.5% senior notes due 2025. We view this as positive (extending maturity profile). JANUARY 17, 2023 1 This report was prepared by an analyst(s) employed by Desjardins Capital Markets and who is (are) not registered as a research analyst(s) under FINRA rules. Please see disclosure section on pages 2–4 for company-specific disclosures, analyst certification and legal disclaimers.

Comment by BBDB859 on Jan 19, 2023 9:21am
Thanks for this Bicente. Nice to see the validation of the TD #'s. It's interesting that they expect an Upgrade in Ratings in Q1/23. Of course it'll happen, given the paydowns of the 2 Notes for 2024/25. Now our runway is clear untill June 2026 for the $1.2B Note. We now have 3 years to pay off that Note. That's easily achievable. Have a good trading day boys. I think we'll say ...more  
Comment by bicente on Jan 19, 2023 9:26am
- Hey 859 , this is from the Disnat application ( Caisse populaire) ..I haven't spoken to anyone there yet since the pre-release .. I'm a little busy today so probably won't do any trading , especially that it looks like we will have a red day in the markets - will be doing some negotiating with tenants today ..have a good one .. GLTA
Comment by Skyisthelimite on Jan 19, 2023 9:27am
We have to admit that Poirier from Desjardins was spitting straight facts for at least 6 months now...
Comment by Form001 on Jan 19, 2023 9:30am
It was easy 6 months ago to understand the coming numbers, others analysts are just working for their own customers, easy to understand.
Comment by bicente on Jan 19, 2023 9:33am
.. yes he has been the closest I've seen ... meanwhile behind the desk they've not had too much trust for the bomber ..all that is changing now , for the better..GLTA  
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