Fubotv earnings beat by $0.10, revenue topped estimates
Investing.com -- Shares of Bombardier Inc (TSX:BBDb) soared 3% on Monday, lifting the stock to its highest level since 2011, after RBC (TSX:RY) Capital Markets increased its price target on the business jet manufacturer to C$175 from C$108. The call reflects growing investor confidence in the company’s long-term free cash flow potential and valuation re-rating despite near-term earnings remaining below Street estimates.
Analyst James McGarragle reiterated his second-quarter 2025 EBITDA forecast at C$336 million, which remains shy of the consensus figure of C$346 million, citing a heavier manufacturing mix weighing on margins. However, he maintained his full-year 2025 EBITDA view at C$1.58 billion, above consensus of C$1.55 billion, and forecast free cash flow of C$795 million, at the high end of Bombardier’s guidance.
“Our target multiple moves to 9.5x (from 6.5x) resulting in our $175 PT,” McGarragle said in a note Monday. He added, “We continue to flag Bombardier as our top idea reflecting a HSD FCF yield on our 2025 estimate and the opportunity to compound that FCF at a DD CAGR out to 2030E.”
The change in valuation multiple reflects RBC’s rising confidence in Bombardier’s ability to execute its strategy and capitalize on robust demand for business aviation. Earlier this month, Bombardier announced a sizable order of 50 jets from a new customer, which RBC said could further lift the company’s full-year cash flow.
While RBC left its near-term earnings forecasts unchanged, the longer-range outlook appears more bullish, anchored by structural improvements in Bombardier’s operations and a strong backlog. The note emphasized that the market still underestimates the company’s compounding potential over the next several years despite the stock’s recent rally.
The raised target reflects similar sentiments from other firms, such as TD (TSX:TD) Securities, which raised its price target to C$151 from C$128, as well as BMO (TSX:BMO) Capital, raising from C$130 to C$150. BMO analyst Fadi Chamoun cited the new order as proof of a "healthy market," saying, "The business aviation cycle remains on firm footing and the recent significant order for 50 aircraft announced on June 30 further solidifies the outlook."
Bombardier has continued to pivot toward higher-margin services and aftermarket business while ramping up production capacity. Investors have rewarded the transformation, with the stock almost doubling in the last 12 months on improving fundamentals and favorable sector tailwinds.