Bombardier wins price target raise at Citi

Its third quarter results are in the books and Citi analyst Stephen Trent is more bullish on Bombardier (Bombardier Stock Quote, Chart, News, Analysts, Financials TSX:BBD.B).

As reported by The Globe and Mail, Trent November 29 maintained his “Buy” rating on BBD while raising his price target on the stock from $109.00 to $113.00.

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

On November 7, Bombardier reported its Q3, 2024 results. The company posted Adjusted EBITDA of $307-million on revenue of $2.1-billion, a topline that was up 12%, year-over-year.

“With a sustained increase in revenues, profitability and record aftermarket performance, Bombardier’s strong results this quarter are a testament to our long-term plan and our team’s ability to execute, meeting commitments week after week,” CEO Éric Martel said. “We have once again posted a healthy book-to-bill(5) ratio, which in turn has maintained our backlog(4) and predictability. This is all made possible by our second to none product portfolio and customer focus. As we enter the last months of the year, I am proud that our operations and service network continue to perform at a high level and are well positioned to deliver on full-year guidance.”

Trent explained why he thinks BBD can expand without margin compression, going forward.

“…Bombardier probably doesn’t need to undertake significant, interior design work on individual jets destined for defence customers, as it does with corporate/high net worth customers,” the analyst wrote. “With significant mission capabilities of Bombardier’s global aircraft, the company’s first Global 6500 jet delivery to the U.S. Army’s High Accuracy Detection and Exploitation System (HADES) program earlier this week could lead other militaries to take notice. The U.S. Army’s decision to acquire this product could also put Bombardier in a good position, in light of 2025E North America policy uncertainties.”