Citi says Bombardier is a buy

Following a panel discussion with industry brokers, Citi analyst Jason Gurksy has maintained his “Buy” rating on Bombardier (Bombardier Stock Quote, Chart, News, Analysts, Financials TSX:BBD.B).

The analyst says the macro picture appears better-than-expected for BBD.

“We hosted the same set of brokers for a call back in January 2024, and there was a unanimous view then that the pipeline of deals coming into the year was much stronger than at a similar time in 2023,” Gursky wrote. “That said, there was some level of caution about the back half of the year given the U.S. election. However, it appears things have gone better than expected year-to-date – with volumes up year-over-year and no slow-down in sight for the second half. Demand appears broad-based across product types, with North America, the Middle East and India getting regional mentions. Importantly, the introduction of Gulfstream’s G700 appears to be driving a supply of used G650s into the market – which is spurring industry volumes as used buyers are in some cases trading up into what is still viewed to be a very attractive product. Finally, several participants noted that sales cycles have elongated somewhat – to three months – as more supply has come to market and buyers have more choices. It seems they want to kick a few more tires before pulling the trigger.”

As reported in the Globe and Mail, Gursky June 5 maintained his “Buy” rating and price target of $83.00 on Bombardier.

“Relative to its past, Bombardier now looks to be a much stronger, more stable company, even as ongoing global supply chain issues could put some constraints on the sector’s valuation,” the analyst added.