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Bombardier (TSE:BBD.B)
TSX:BBD.B
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Bombardier
(TSX:BBD.B)
64Neutral
Positive Factors
Aftermarket Revenue Performance
F2024 aftermarket revenues at $2,036m (+16.5% y/y) exceeded management target of $2.0b a year ahead of plan.
Earnings and Cash Flow Improvement
A combination of improving end market demand post pandemic, cost restructuring program, maturing production rate on Global 7500 aircraft program, alongside deleveraging and lowered interest costs will support significant improvement in earnings and cash flow over the coming three to four years.
Negative Factors
Tariff-Related Uncertainties
Tariff-related uncertainties may create disruptions in orders in the near term.
Bombardier (BBD.B) vs. S&P 500 (SPY)
Market Cap
$7.97B
Dividend YieldN/A
Average Volume (3M)808.26K
Price to Earnings (P/E)17.2
Beta (1Y)1.86
Revenue Growth9.57%
EPS Growth-27.38%
CountryCA
Employees17,100
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)4.72
Shares Outstanding86,072,685
10 Day Avg. Volume740,978
30 Day Avg. Volume808,260
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.63
Price to Cash Flow (P/CF)1.60
P/FCF Ratio1.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$113.39Price Target Upside39.94% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Bombardier Business Overview & Revenue Model
Company DescriptionBombardier, Inc. manufactures planes and trains. It operates through the following segments: Business Aircraft; Commercial Aircraft; Aerostructures and Engineering Services; and Transportation. The Business Aircraft segment designs, manufactures and provides aftermarket support for three families of business jets, spanning from the light to large categories. The Commercial Aircraft segment designs and manufactures a portfolio of commercial aircrafts. The Aerostructures and Engineering Services segment designs and manufactures major aircraft structural components such as engine nacelles, fuselages and wings and provides aftermarket component repair and overhaul as well as other engineering services for both internal and external clients. The Transportation segment offers product range and services to the rail industry and covers the full spectrum of rail solutions such as complete trains to subsystems, services, system integration, signaling, and e-mobility solutions. The company was founded on June 19, 1902 and is headquartered in Montreal, Canada.
How the Company Makes MoneyBombardier generates revenue primarily through the sale of its business jets, which are known for their innovation, performance, and reliability. The company's key revenue streams include new aircraft sales, which account for a significant portion of its income, as well as aftermarket services such as maintenance, repair, overhaul, and parts sales. Bombardier also benefits from long-term service agreements with customers, ensuring a sustainable revenue flow. Partnerships with suppliers and strategic alliances further enhance its market position and contribute to its financial success. Additionally, Bombardier's global presence and strong brand reputation enable it to capture a sizable share of the business aviation market.
Bombardier Financial Statement Overview
Summary
Bombardier has shown a strong revenue recovery and improved gross margins. However, its financial stability is concerning due to high leverage and negative equity. Cash flow generation is adequate but declining, suggesting the need for improved operational efficiencies and reduced financial liabilities.Income Statement
Bombardier has shown a strong recovery in revenue, growing from $6.085 billion in 2021 to $8.665 billion in 2024, with a recent annual growth rate of 7.69%. The gross profit margin improved significantly to 20.6% in 2024, indicating better cost management. However, EBIT has dropped to $0 in 2024, and the net profit margin decreased to 4.27% from 5.53% in 2023, pointing to challenges in operating efficiency.72
Positive
Balance Sheet
The balance sheet reflects high leverage, with a negative stockholders' equity of -$1.991 billion in 2024, suggesting financial instability. The debt-to-equity ratio is not calculable due to negative equity, highlighting significant financial risk. However, total debt has been reduced over the years, showing some efforts towards financial restructuring.55
Neutral
Cash Flow
Operating cash flow has been positive, but it decreased from $623 million in 2023 to $405 million in 2024. Free cash flow also declined slightly to $232 million in 2024, indicating potential liquidity challenges. The operating cash flow to net income ratio is 1.10, suggesting reasonable cash generation relative to net income.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 8.66B | 8.05B | 6.91B | 6.08B | 6.49B | Gross Profit |
| 1.78B | 1.63B | 1.26B | 924.00M | 516.00M | EBIT |
| 0.00 | 786.00M | 307.00M | 218.00M | -423.00M | EBITDA |
| 1.17B | 933.00M | 722.00M | 635.00M | 87.00M | Net Income Common Stockholders |
| 370.00M | 445.00M | -128.00M | -249.00M | -170.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.68B | 1.69B | 1.76B | 1.75B | 2.68B | Total Assets |
| 12.67B | 12.46B | 12.32B | 12.76B | 23.09B | Total Debt |
| 5.54B | 5.61B | 5.98B | 7.05B | 10.07B | Net Debt |
| 3.89B | 4.01B | 4.69B | 5.37B | 7.63B | Total Liabilities |
| 14.66B | 14.86B | 15.09B | 15.85B | 29.75B | Stockholders Equity |
| -1.99B | -2.40B | -2.76B | -3.09B | -9.32B |
| Cash Flow | Free Cash Flow | |||
| 232.00M | 257.00M | 717.00M | 95.00M | -3.19B | Operating Cash Flow |
| 405.00M | 623.00M | 1.07B | 332.00M | -2.82B | Investing Cash Flow |
| -164.00M | 118.00M | -304.00M | -89.00M | 967.00M | Financing Cash Flow |
| -203.00M | -438.00M | -1.13B | -3.21B | 1.71B |
Bombardier Technical Analysis
Negative
81.03
Price Trends
87.24
Negative
93.56
Negative
93.10
Negative
Market Momentum
-1.75
Positive
45.16
Neutral
39.16
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:BBD.B, the sentiment is Negative. The current price of 81.03 is below the 20-day moving average (MA) of 84.59, below the 50-day MA of 87.24, and below the 200-day MA of 93.10, indicating a bearish trend. The MACD of -1.75 indicates Positive momentum. The RSI at 45.16 is Neutral, neither overbought nor oversold. The STOCH value of 39.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:BBD.B.
Bombardier Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | C$226.96M | 4.10 | 36.75% | 0.38% | 19.21% | 105.30% | |
74 Outperform | $1.09B | 20.96 | 8.91% | ― | 19.98% | 217.02% | |
66 Neutral | C$611.43M | 28.83 | 2.58% | 0.93% | 8.96% | ― | |
65 Neutral | C$173.44M | 15.21 | 16.43% | ― | 18.03% | -6.83% | |
64 Neutral | $7.97B | 17.18 | -18.58% | ― | 9.57% | -27.38% | |
61 Neutral | $8.21B | 13.22 | 1.07% | 3.07% | 3.78% | -16.88% |
* Industrials Sector Average
Performance Comparison
TSE:BBD.B
Bombardier
81.03
24.38
43.04%
CAE
CAE
24.35
4.35
21.75%
TSE:DRX
ADF Group Inc. SV
7.90
-0.58
-6.84%
TSE:FTG
Firan Tech
6.89
1.38
25.05%
TSE:HRX
Heroux-Devtek
32.48
14.69
82.57%
TSE:MAL
Magellan Aerospace
10.70
2.27
26.93%
Bombardier Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -4.34% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a strong performance by Bombardier in 2024, with significant achievements in service revenue, financial metrics, and product performance. However, the uncertainty surrounding potential tariffs from the U.S. and ongoing supply chain issues present challenges moving forward.Highlights
Record Service Revenue Achievement
Bombardier achieved $2 billion in service revenue in 2024, a full year ahead of schedule, doubling a high-margin business organically in less than five years.
Improved Financial Metrics
Adjusted EBITDA margin increased to 15.7% in 2024, with a significant 11% year-over-year increase in adjusted EBITDA, and a 31% increase in adjusted net income.
Leverage Ratio and Credit Rating Improvement
Net leverage improved to 2.9x, reaching the 2025 target a year early, with credit rating upgrades from both Moody's and S&P Global Ratings.
Product Performance and Market Leadership
The Global 7500 set multiple speed records, and the Challenger 3500 became the fastest platform to reach 100 deliveries in its class.
Robust Backlog and Order Activity
Backlog increased to $14.4 billion, with a book-to-bill ratio of 1 in 2024, reflecting strong demand for products and services.
Lowlights
Tariff Uncertainty
Potential tariffs from the U.S. pose a significant risk, causing the company to withhold guidance for 2025 despite a strong performance record.
Supply Chain Pressures
Ongoing supply chain challenges created over 50 basis points of drag on EBITDA margins for the year and missed deliveries in 2024.
Company Guidance
During the Bombardier earnings call for the fiscal year 2024, the company refrained from providing guidance for 2025 due to the uncertainty surrounding potential tariffs. Despite this, Bombardier highlighted its achievements in 2024, including reaching $2 billion in service revenue a year ahead of schedule and achieving an adjusted EBITDA margin of 15.7%. The company also reported a backlog increase to $14.4 billion, a 1x book-to-bill ratio, and a net leverage ratio of 2.9x, surpassing its 2025 target. While supply chain challenges persisted, causing a 50 basis point drag on margins, Bombardier managed to grow its total revenue to $8.7 billion, an 8% increase from the previous year. The company also noted a 48% reduction in gross debt since 2020, reflecting its focus on financial resilience. Despite the tariff uncertainty, Bombardier remains optimistic about the strong demand for its aircraft, favorable market conditions, and its ability to manage potential disruptions with contingency plans.Bombardier Corporate Events
Business Operations and StrategyFinancial Disclosures
Bombardier Achieves Fourth Year of Growth with Strong 2024 Results
Positive
Feb 6, 2025
Bombardier has posted its fourth consecutive year of growth and solid financial performance, with revenues reaching $8.7 billion and a record service performance of over $2 billion. The company delivered 146 aircraft and achieved a significant adjusted EBITDA increase of 11% to $1.36 billion. Despite achieving a net leverage ratio of 2.9x and strong operational metrics, Bombardier has decided to defer providing 2025 guidance due to new tariff-related uncertainties stemming from recent U.S. executive orders.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.