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BMO Capital Markets has reiterated its Outperform rating on shares of Bombardier (BBB/B: CN) (OTC: OTC:BDRBF), with a steady price target of Cdn$129.00.
The firm's positive outlook is based on the stable demand for business aviation and Bombardier's ongoing efforts to enhance profitability and reduce financial leverage.
Bombardier is anticipated to reveal its third-quarter financial results for the fiscal year 2024 on November 7, before market open.
The financial institution expressed confidence in Bombardier's trajectory, highlighting the company's potential for a robust conclusion to the fiscal year 2024 and greater clarity regarding its fiscal year 2025 financial goals.
This sentiment comes amid a period where the business aviation sector is witnessing a relatively stable demand environment.
In preparation for the upcoming earnings report, BMO Capital has made a slight upward adjustment to its forecast for Bombardier. The firm's maintained price target of Cdn$129.00 reflects a consistent vote of confidence in the company's performance and strategic initiatives.
In other recent news, Bombardier Inc. posted a robust Q2 performance for 2024, outperforming industry peers in revenue and delivery consistency. The company's Q2 revenue rose by 32% year-over-year, with services contributing $507 million.
Adjusted EBITDA increased by 22%, and a positive adjusted net income of $111 million was reported. Despite supply chain challenges, particularly with engines, Bombardier saw significant growth in revenue and deliveries.
The company's defense sector presence was highlighted at the Farnborough Airshow, with recent wins in Finland and Germany using the Challenger 650 aircraft. Bombardier is also eyeing expansion in this sector, which is showing positive momentum. In addition, the company is expecting a stronger Q4 due to seasonal factors, maintaining confidence in their full-year guidance.
These recent developments reflect Bombardier's focus on execution and its ability to navigate challenges, such as the strike at the Belfast plant and supply chain issues. The company's executives have also discussed potential acquisitions, including assets from Spirit.
InvestingPro Insights
With Bombardier's third-quarter financial results on the horizon, real-time data from InvestingPro provides a snapshot of the company's current standing. The company's market capitalization is a robust $7.1 billion, reflecting its significant presence in the industry. A closer look at profitability metrics reveals a P/E ratio of 25.3, which adjusts to a more attractive 18.45 when looking at the last twelve months as of Q2 2024. This suggests a more favorable earnings perspective for investors considering the company's future growth potential.
The company's revenue growth has been impressive, with a 16.08% increase over the last twelve months as of Q2 2024 and an even more remarkable quarterly growth of 31.52% in Q2 2024. These figures speak to Bombardier's ability to expand its revenue streams in a competitive market. Additionally, the company's gross profit margin stands at 20.1%, indicating a solid capability to translate sales into profit.
InvestingPro Tips highlight that Bombardier's stock price movements have been quite volatile, yet the company has seen a high return over the last year, trading near its 52-week high. Analysts predict the company will be profitable this year, which aligns with the company's own profitability over the last twelve months. These insights, combined with a significant price uptick over the last six months and a strong return over the last five years, paint a picture of a company on the rise. It's worth noting, however, that Bombardier does not pay a dividend to shareholders, which might be a consideration for income-focused investors.
For those interested in a deeper dive, there are additional InvestingPro Tips available on https://www.investing.com/pro/BDRBF, providing further guidance on Bombardier's performance and potential investment opportunities.
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