Bombardier news season about to take off, says Byron Capital’s Tom Astle

The bustling trade show, which can date its history back to the early parts of the last century, is put on by the ADS Group , a British aerospace industry organization. Last year, the Boeing Dreamliner 787 made its debut at Farnborough, more than six decades after the world’s first production jetliner, the de Havilland Comet, was introduced at the show.

Byron Capital analyst Tom Astle says that while the next month will be “newsy” for Canadian aerospace giant Bombardier (TSX:BBD.B), expectations are less than stellar, as is evidenced by the company’s share price, which is near five-year lows. Astle says that this particular show is important to Bombardier because the company’s new C-Series planes are scheduled to hit the market later this year, or early next. And unlike recent programs at Boeing and Airbus, he says, the C-Series program is more or less on schedule.

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Bombardier is divided into two segments that deliver roughly the same amount of revenue, Bombardier Aerospace, and Bombardier Transportation. The company’s roots go back to 1937, when Quebec mechanic Joseph-Armand Bombardier dreamed of dreamed of building a vehicle that could “float on snow.” A few years later schoolchildren in rural parts of that province were among the first people in the world to ride snowmobiles, which began as large, multi-passenger vehicles. By the time of Bombardier’s death, in 1964, his eponymous concern enjoyed sales of $20 million. Bombardier’s later ventures into aerospace and railway grew the company to the internationally recognized giant it has become, with more than $18-billion in annual revenue.

Astle says there are a couple of things investors should keep an eye out for with regards to Bombardier. First, the company’s lineup of booked orders is lower than normal. Second, the company, especially its lucrative train group, is exposed to European economies. But the Byron Capital analyst says most of this exposure is to stronger European countries such as France, Germany and Sweden, and much of the potential down side of this exposure is reflected in the company’s current share price. In a research update to clients yesterday, Astle maintained his BUY rating on Bombardier and $5.50 twelve-month target on the stock.

Shares of Bombardier closed today up 1.3% to $3.79.

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