Byron Capital analyst Tom Astle says investors should buy Bombardier for its strength in for business jets and trains and use the weakness in its commercial aircraft to get a good entry price. This morning, Bombardier (TSX:BBD.B) announced the largest business aircraft sale in its history.
The deal with luxury jet carrier VistaJet calls for a guaranteed order of 56 jets. If all options are exercised, Bombardier will supply 86 more jets at a value of $7.8-billion. The value of the firm order is $3.1-billion.
Swiss-based VistaJet boasts the largest wholly owned private jet fleet outside the Americas.
Steve Ridolfi, President, Bombardier Business Aircraft, talked about the order.
“By any standard, this is a historic order for Bombardier. It goes without saying that we are thrilled VistaJet has again chosen to grow their fleet with the industry-leading Global family,” he said, adding: “We welcome VistaJet’s ongoing commitment to global coverage within existing and developing new markets. Our Global aircraft are perfect for VistaJet’s business strategy to deliver the ultimate business jet family to all corners of the world.”
Byron Capital analyst Tom Astle says the sale will put Bombardier back on the screens of many investors who may have been lulled to sleep by its relative inactivity. He says that while fleet orders have lower margins, this sale will surely cement Bombardier’s top position in the large business jet space. In a research update to clients today, Astle reiterated his BUY rating and $4.50 target on Bombardier.
Today’s news follows the admission from Bombardier, earlier this month, that its CSeries would be delayed six months, until the end of June, 2013. Astle says investors should buy Bombardier for its strength in for business jets and trains and use the weakness in its commercial aircraft to get a good entry price. After conducting a study into the quarterly performance of the company over the past decade, Astle says Q4 is “by far” the best quarter to make money on Bombardier.